The arrest is the latest twist in a long-running corruption inquiry into Mr Chen's family's alleged misuse of state funds and campaign finances during his administration.
Mr Chen, who advocated Taiwan's independence to the irritation of Beijing and Washington, ended half a century's rule by the Kuomintang party when he was elected president in 2000. He has been the subject of a corruption inquiry since he stepped down in May.
The former president was questioned by prosecutors yesterday and later led away in handcuffs to the district court, where three judges were to rule on whether he could be detained without charge. The judges had yet to make a decision by late last night, as Mr Chen complained in court that he was beaten by bailiffs and had to be taken to a hospital to be diagnosed.