An R&B singer known as Khalil was also held, Miami Beach police said via Twitter.
Officers saw two cars racing at 4:09 am today, with two vehicles apparently used to block the area off, Miami Dade-Police spokesman Sgt Bobby Hernandez told WSVN in South Florida.
According to police, Bieber was driving a Lamborghini and Khalil was driving a Ferrari. Both cars were towed.
Bieber failed a field sobriety test and was taken to the Miami Beach police station for a breath test and processing, Hernandez said.
Bieber and Khalil both face charges of drag-racing and driving under the influence.
Bieber will be transported to the Miami-Dade County jail, Sgt Hernandez said.
An email seeking comment from his publicist Melissa Victor was not immediately returned.
The street where police say Bieber was racing is a palm-tree-lined residential area in mid-Miami Beach. Along one side of the street are small apartment buildings, and on the other side are a secondary school, a youth centre, a golf course and a city firehouse.
Under Florida law, people under the age of 21 are considered driving under the influence if they have a blood-alcohol content of .02% or more - a level he could reach with one drink. For 21 and over, it is .08%.
For a first drunken driving offence, there is no minimum sentence and a maximum of six months, a fine of 250 to 500 dollars (£150-£300), and 50 hours of community service. For anyone under 21, there is an automatic six-month licence suspension.
A first drag-racing offence nets a sentence of up to six months, a fine of 500 to 1,000 dollars (£300-£600) , and a one-year licence suspension.
Earlier this month, officials said that detectives in California searched Bieber's home looking for surveillance footage that might serve as evidence the pop star was involved in an egg-throwing vandalism case that caused thousands of dollars in damage to a neighbour's home. Officials said Bieber was at the home and cooperated with authorities
In that case, authorities arrested one member of Bieber's entourage on suspicion of drug possession: Lil Za, a rapper whose real name is Xavier Smith.
After being taken to jail, Smith had felony vandalism added to his potential charges and was released on bail at about 8:15 pm.
The singer lives in a gated community in Calabasas, a celebrity enclave about 30 miles (50 kms) northwest of central Los Angeles.
Previous investigations into Bieber's conduct by the sheriff's department have not resulted in charges.
In October, prosecutors declined to charge Bieber after a neighbour complained he drove recklessly through the area. Prosecutors in November 2012 also declined to charge the singer after a paparazzo accused him of punching and hitting him after leaving a Calabasas cinema.
Justin Bieber was only 15 when his platinum-selling debut My World was released. The singer from Ontario had placed second in a local singing contest two years earlier and began posting performances on YouTube, according to his official website. The videos caught the attention of a talent agent who helped Bieber land an audition with R&B singer Usher. Usher, with Island/Def Jam chairman L.A. Reid, signed him to a recording contract.
A copy of the arrest report, published by the police, said Bieber swore at officers when he was stopped.
The arresting officer said the singer had "bloodshot eyes" and added that he could smell alcohol on his breath.
He added that he asked Bieber to take his hands out of his pockets and the teenager replied: "I ain't got no f****** weapons - why do you have to search me? What the f*** is this about?"