The mayor of the southern Italian island of Lampedusa was arrested on suspicion of extorting money from a businessman, police said.
Bernardino De Rubeis was taken in for questioning over claims he had used his position as a public servant to illegally collect the cash.
The businessman reported Mr De Rubeis to the police, saying the mayor had forced him to hand over money.
The mayor was arrested at the request of Sicilian prosecutors and was being questioned.
Searches were carried out in the mayor's office, a spokesman for police in Sicily said.