John Galliano was arrested in the French capital on Thursday for allegedly making anti-Semitic remarks.
The incident took place in the fashionable district of Marais, where the Dior chief designer, 50, reportedly verbally accosted a couple outside a Parisian cafe.
The police were called and they detained him. He is believed to have been drinking heavily.
"We arrived extremely quickly and managed to break up the disturbance," a police source said.
"The man involved was briefly arrested and then released pending charges for assault.
"Witnesses said he swore heavily, using anti-Jewish insults, before attacking a couple.
Gibraltar-born John is currently preparing to show Christian Dior's autumn/winter 2011 collection at Paris Fashion Week on March 4.