Gunmen seized Prime Minister Ali Zeidan from a Tripoli hotel early Thursday, in the latest sign of the lawlessness sweeping Libya.
The pre-dawn abduction comes five days after US commandos embarrassed and angered Libya's government by capturing senior Al-Qaeda suspect Abu Anas al-Libi off the streets of Tripoli and whisking him away to a warship.
"The head of the transitional government, Ali Zeidan, was taken to an unknown destination for unknown reasons by a group" of men believed to be former rebels, the government said in a brief statement on its website.
A source in the premier's office said Zeidan had been taken from Tripoli's Corinthia Hotel, where he resides.
"A large number of armed men entered the place very early on Thursday. But we did not know what was happening," a hotel employee told AFP, speaking on condition of anonymity.
A group of former rebels, which had roundly denounced Libi's abduction and blamed Zeidan's government for it, said it had "arrested" Zeidan.
The Operations Cell of Libyan Revolutionaries, which in principle reports to the defence and interior ministries, said on Facebook it had seized Zeidan "on the prosecutor's orders".
The premier "was arrested under the Libyan penal code... on the instructions of the public prosecutor", the group said.
It said he was detained for "crimes and offences prejudicial to the state" and its security.
The cabinet said on its Facebook page that ministers were "unaware of immunity being lifted or of any arrest warrant" for the prime minister.
The Operations Cell of Libyan Revolutionaries had expressed outrage at the brazen daylight raid by US commandos to capture Libi.
It said on Tuesday it had told its fighters to be prepared for orders to "hunt down and expel foreigners who are illegally in the country".
It added that it was on high alert "in light of the deterioration in security and damage to the country's sovereignty by foreign intelligence bodies".
The cabinet and the General National Congress, Libya's top political authority, were dealing with the situation, the statement said, while calling on citizens to remain calm.
US State Department spokeswoman Jennifer Psaki, travelling with Secretary of State John Kerry in Brunei, said Washington was seeking more information on the reported kidnapping.
"We are looking into these reports and we are in close touch with senior US and Libyan officials on the ground," she told reporters.
"We are working to determine more details. Our embassy staff is safe in Tripoli. We have no further details at this time."
Zeidan, who was named prime minister a year ago, had on Tuesday condemned the US raid and insisted that all Libyans should be tried on home soil.
The General National Congress has demanded that Washington "immediately" hand back Libi, claiming his capture was a flagrant violation of Libyan sovereignty.
Libi - real name Nazih Abdul Hamed al-Raghie - was on the FBI's most wanted list with a $US5 million ($A5.31 million) bounty on his head for his alleged role in the 1998 twin bombings of two US embassies in East Africa.
He is reportedly being held aboard a US Navy ship in the Mediterranean.
US President Barack Obama said on Tuesday Libi was involved in plots that killed hundreds of people and he will be brought to justice.
Vowing that America will continue to hunt down regional terror groups, Obama said Libi "helped plan and execute plots that killed hundreds of people, a whole lot of Americans. We have strong evidence of that. And he will be brought to justice."