The revisionist British historian David Irving is likely to remain in custody in Austria for at least a week, prosecutors say.
Irving maintains his conclusions come from serious research
The authorities are considering whether to put him on trial for denying the Nazi mass extermination of Jews, the public prosecutor's spokesman said.
He was detained a week ago on a warrant issued in 1989 under Austrian laws that make it a crime to deny the Holocaust.
Mr Irving was stopped in the southern province of Styria, en route to Vienna.
If formally charged, tried and convicted, Mr Irving could face up to 20 years in prison, said the spokesman, Otto Schneider.
In his books, Mr Irving has argued that the scale of the extermination of the Jews by the Nazis in World War II has been exaggerated.
He also claimed that Nazi leader Adolf Hitler knew nothing of the Holocaust.
Libel case lost
He told a libel hearing in London in 2000 that there had been no gas chambers at the Auschwitz camp.
He lost the case and the judge branded him "an active Holocaust denier". A spokesman for the Austrian interior ministry, Rudolf Gollia, told the BBC that Mr Irving was first taken to the town of Graz, but was now in custody in Vienna.
COUNTRIES WITH LAWS AGAINST HOLOCAUST DENIAL
Anti-Nazi groups in the UK congratulated the Austrian government.
The chairman of the Holocaust Educational Trust, Lord Greville Janner, said he hoped the move would "lead to a successful prosecution".
The head of the Holocaust Memorial Day Trust, Stephen Smith, said denial was not a matter of opinion.
"Austrian law demands incisive action to protect its citizens from a repeat of the past," he added.
Mr Irving was previously arrested in Austria in 1984.
This time, the historian was stopped near the town of Hartberg while reportedly on his way to address a students' club in Vienna.
Mr Irving came into the spotlight in 2000 when he sued US academic Deborah Lipstadt for describing him as a "Holocaust denier" in her 1994 work Denying the Holocaust: The Growing Assault on Truth and Memory.
Giving his verdict, the British judge said Mr Irving was "an active Holocaust denier; that he is anti-Semitic and racist and that he associates with right-wing extremists who promote neo-Nazism".
Brian Levin, a US professor of criminal justice who has studied Mr Irving's arguments, told the BBC News website that "to punish him on the basis of his ideas is fundamentally flawed".
"I believe we have to cherish freedom of speech," Mr Levin said, arguing that the way to deal with Holocaust denial was through educational campaigns, "not by silencing".