The peer was held as 15 people were arrested when police moved in to break up an Occupy Democracy protest.
Organisers said on Twitter that Baroness Jones was “dearrested once police worked out who she is” [sic] during the unrest this morning.
Police said the protest was broken up after demonstrators broke Police Reform and Social Responsibility Act 2011 by sleeping on a tarpaulin in the square.
Pictures from the scene showed police carrying protesters away after they apparently refused to leave the area.
Occupy London’s Twitter feed posted a picture of Baroness Jones being arrested alongside the caption: “Jenny Jones goes down for defending the right to protest!!!!!”
The Green Party confirmed Baroness Jones had been arrested after being “witness to a close friend being arrested as part of the protest in defence of civil liberties and the right to protest”.
The ex-Deputy Mayor of London and member of the Metropolitan Police Authority said: “The police have a duty to facilitate peaceful protest in this country which people have a legal right to do, but that appears to end as soon as you come within shouting distance of the Westminster village.
“The people who run this country should not be able to tuck demonstrators away out of sight. Parliament needs to listen and people should have the right to get their voices heard.”
A spokesman for the Met said: “At approximately 11am today, Tuesday 21 October a 64 year old woman was arrested in Parliament Square for obstructing police. She was de-arrested after giving details suitable for a summons.”
— Louis Mignot (@LouisMignot) October 21, 2014
The protest in Westminster began on Friday, and won support from actor and comedian Russell Brand, who addressed the rally and delivered pizza to demonstrators.
The Met added: “This morning there were around 15 people demonstrating in Parliament Square. The group on the grassed area had been sleeping on a tarpaulin which is prohibited under the Police Reform and Social Responsibility Act of 2011, namely they have items with them to enable them to sleep in Parliament Square.
“We informed them of the breach of legislation and asked them to leave, this was done on a one-to-one basis. They were told that if they failed to leave they would be removed from the site and would be liable to summons for the offence.
“The tarpaulin has been removed and fifteen people have been arrested for failing to provide details suitable for a summons. They have been taken to a central London police station.”