A wanted man was surrounded by armed police who suspected he had a gun, two days after a house was petrol-bombed in the city.
The arrest was carried out close to Lime Street station after police were alerted to reports of a man with a gun.
Footage circulating online appeared to show the track-suited suspect, 33, being detained in the city centre and placed in handcuffs.
It follows an arson attack on an address in the L7 area of Liverpool on Saturday, police said, and a series of threats issued on social media.
In the widely-viewed clip at Lime Street, officers tell the man: "I'm going to explain to you what's happened.
"We've had information you may be in possession of a firearm, that's what's facilitated an armed police response to you.
"…on 11th July, there's been a petrol bomb attack and you're currently a suspect for it.
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"There's been an offence which has been identified which needs to be investigated."
Officers ask him if he has been hurt, and he replies, "No."
A police officer adds he is wanted on warrant.
The 33-year-old was arrested at about 11.30am, on Monday, July 13.
A Merseyside Police spokeswoman said: "The man was arrested on suspicion of possession of a firearm without a certificate and arson in connection with separate ongoing investigations and was taken to a police station for questioning.
"He has been released on bail pending further enquiries."
The ECHO understands a video of a man holding a gun appeared on social media, prompting police's high-profile response.
Before that, people shared a clip which showed men or youths banging on the windows of a home with weapons, possibly hammers.