Police arrested Syed Ali Shah Geelani in a raid on his house in Srinagar. Geelani has not been charged.
His arrest overnight came as tensions remained high between India and Pakistan. Mr Geelani is a former chairman of the All Parties Hurriyat Conference.
Police director-general A.K. Suri said Geelani was detained under the Prevention of Terrorism Act over allegations he was “aiding and abetting terrorist activities...(and) funding terrorist organizations in the state”. He has been sent to a jail in Ranchi in the eastern state of Jharkhand.
Three other activists were also detained under the act, passed in March, which gives police broad powers of arrest and allows suspects to be held for 30 days without appearing in court.
Suri said the arrests followed the discovery by police and income tax officials of more than $30,000 in a house.—Agencies