The man was seen hanging from the ropes tying the Carnival Adventure cruise ship to Circular Quay about 3pm today.
A NSW Police boat arrived at the scene, finding the man suspended over the water and a crowd of spectators watching on.
Police said the mooring line was lowered down towards the police boat before a 30-year-old man was arrested.
From Circular Quay, he was taken to Day Street Police Station.
No charges have yet been laid.