The streaker had ‘Free Tibet’ written on his back and managed only a short distance before being tackled by police in Henley-on-Thames.
He was covered in a blanket by officers and led away.
A Thames Valley Police spokeswoman confirmed that a 27-year-old man from Henley has been arrested on suspicion of outraging public decency.
Hundreds of onlookers watched the man disrupt proceedings in the Oxfordshire town as the torch made its way through on the 53rd day of the relay.
A Henley resident who was lining the procession route said the streaker came out of the crowd.
Andrew Tinsley, and environmental scientist, said: ‘The guy came out of nowhere. He definitely picked his moment to shine.
‘The streaker completely out-footed the policeman on the other side of the bus.
‘The juxtaposition of the bus relay logo of a running man and the streaker was immensely funny.’
As well as emblazoning his back with the message, the streaker also carried a fake Olympic torch as he ran past spectators.
On a notable day on the Olympic Torch relay, the Queen welcomed torchbearers to Windsor Castle.
Local residents ran through the grounds of the royal residence with the flaming symbol of the London Games as excitement over the global event mounted.
In 17 days the Queen will declare the Games open during a spectacular ceremony at the Olympic Park in Stratford, east London.