A man named by sources as Starr, 69, was arrested in Warwickshire yesterday "on suspicion of sexual offences" by officers working on Operation Yewtree.
A Metropolitan Police spokesman said the suspect was released on bail between 1am and 1.30am.
The date when he must represent himself to officers is yet to be released by Scotland Yard.
The police spokesman said the arrest falls under the strand of the investigation termed "Savile and others".
Starr has been publicly implicated in the Savile scandal over the past month but has strongly denied the accusations.
Last month he branded Savile "despicable" and "disgusting", and urged police to interview him so he could clear his name.
His arrest follows that of Gary Glitter on Sunday by officers working on Operation Yewtree.
The former pop star was questioned at a central London police station after being detained at his home in the capital.
Glitter, whose real name is Paul Gadd, was photographed leaving Charing Cross police station later that day but Scotland Yard did not comment on his release.
Savile, who died last year at the age of 84, is now believed to have been one of the UK's most prolific abusers, with about 300 possible victims.
Scotland Yard is leading a national investigation into the television and radio star's activities.
Detectives are following 400 lines of inquiry, while the BBC has launched an inquiry into the culture and practices at the corporation in the era of Savile's alleged sexual abuse.
It is also looking at the decision- making process that saw a Newsnight investigation into Savile's activities shelved. The review, led by Nick Pollard, former head of Sky News, will report back on its findings later this month.
Savile's estate, reportedly worth £4.3 million, has been frozen in response to the mounting allegations.
NatWest Bank, which is acting as the Jim'll Fix It presenter's will executor and trustee, revealed the distribution of his assets had been put on hold in anticipation of legal action from his alleged victims.