The alleged incident occurred Tuesday and a report was taken, police said.
Avenatti was arrested Wednesday afternoon in the 10000 block of Santa Monica Boulevard by officers with the West Los Angeles station.
He was being held on $50,000 bail on suspicion of domestic violence with injuries. He was expected to be released on bail Wednesday evening.
Details of the allegations against Avenatti were not immediately disclosed. The alleged victim and relationship to Avenatti was not identified.
Avenatti's law firm issued a statement from him: "I wish to thank the hard working men and woman of the LAPD for their professionalism they were only doing their jobs in light of the completely bogus allegations against me. I have never been physically abusive in my life nor was I last night. Any accusations to the contrary are fabricated and meant to do harm to my reputation. I look forward to being fully exonerated."
Some initial media reports described the alleged victim as Avenatti's estranged wife.
However, Lisa Storie-Avenatti, who married Michael Avenatti in 2011, told ABC News that there was no incident involving her and she hadn't seen Avenatti for months.
Her attorney released a statement saying there were never any incidents of domestic violence in their relationship and that his wife never knew him to be physically violent toward anyone.
Avenatti's first wife, Christine Avenatti Carlin, also tweeted: "I have known @MichaelAvenatti for over 26 years we met when he was 21 years old and we were married for 13 years. Michael has ALWAYS been a kind loving father to our two daughters and husband to me. He has NEVER been abusive to me or anyone else. He is a good man."
I have known @MichaelAvenatti for over 26 years we met when he was 21 years old and we were married for 13 years. Michael has ALWAYS been a kind loving father to our two daughters and husband to me. He has NEVER been abusive to me or anyone else. He is a good man.— Christine Avenatti Carlin (@avenatticarlin) November 15, 2018
Avenatti, 47, represents Daniels in her effort to void a non-disclosure agreement she signed with Trump while he was running for president in 2016. The agreement was over a payment she received to keep quiet about an alleged affair the two had a decade earlier.
The attorney also got involved in the battle over Brett Kavanugh's nomination to the U.S. Supreme Court when he represented a client who alleged inappropriate sexual conduct by the nominee.
Avenatti has also discussed the possibility of running for president in 2020.