The 23-year-old, who is not a police officer or a member of police staff, was arrested last night on suspicion of intentionally encouraging or assisting the commission of an indictable offence on or around December 14.
He was questioned at a London police station and released on bail this morning to return in January, a spokesman said.
In a statement today, Scotland Yard said: "Officers investigating the circumstances surrounding a police officer's claim to have witnessed an incident in Downing Street in September 2012 have arrested a man on suspicion of intentionally encouraging or assisting the commission of an indictable offence on or around December 14 2012.
"The 23-year-old was arrested at his home address at 20.00hrs last night, Wednesday December 19, and questioned at a London police station.
"He was released on bail this morning, Thursday December 20, to return on a date in January 2013.
"The 23-year-old - who is the second man to be arrested - is not a police officer or member of police staff."
Yesterday, police widened the investigation into the affair amid signs of strain between senior Conservatives and the police over the treatment of the former chief whip.
Some 30 officers are working on the inquiry - which is being supervised by the Independent Police Complaints Commission (IPCC) - amid claims that officers conspired to fabricate evidence against Mr Mitchell that ultimately led to his resignation in late October.
Prime Minister David Cameron has expressed concern that an officer tried to "blacken the name" of Mr Mitchell amid mounting questions over the initial account of his row with Downing Street police who refused to let him ride his bicycle through the main gates of Downing Street.
The officer is said to have written an email to his local MP, Conservative John Randall, posing as a member of the public and accusing Mr Mitchell of calling police "plebs".
The account contained in the email, written the day before The Sun first broke news of the row on September 21, was very similar to that in the police log, which was later leaked to the Daily Telegraph.
Scotland Yard yesterday said it was conducting an investigation which could look at the possibility of a conspiracy.
In a statement, it said: "The allegation that a serving police officer fabricated evidence is extremely serious. It goes to the very heart of the public's trust in the police service."
An officer was arrested on Saturday on suspicion of misconduct in public office.
The date of the alleged offence came one day after police received fresh information on the "plebgate" affair and one day before the officer was arrested.
The email to Mr Randall, which was passed to Downing Street on September 25, was published by Channel 4 News on Tuesday. It is littered with grammatical errors, spelling mistakes, inappropriate capitalisation and malapropisms, including a reference to Mr Mitchell's "digesting behaviour".
The writer says he was walking past Downing Street with his nephew when he recognised Mr Mitchell, who was having a row with the police.
"Imagine to our horror when we heard MR MITCHELL shout very loudly at the police officers guarding YOU (expletive blacked out) PLEBES!!" and "YOU THINK YOU RUN THE (expletive blacked out) COUNTRY" and just continued to shout obscenities at the poor police officers," it says.
"My nephew, as was I, totally taken aback by his, MR MITCHELLS' behaviour and the gutter language he used, especially it appeared directed at the police officers.
"Now I know that the other people/tourists standing with us were also shocked and some were even, inadvertently filming the incident (it wouldn't surprise me that in this age it'll be on YouTube or other social media website.)"
The police officer did not disclose his job in the email to Mr Randall, who was Mr Mitchell's deputy in the Government whips' office, and reportedly suggested he would quit unless his boss left his post.
Further questions about the account of Mr Mitchell's row with police emerged in relation to CCTV footage of the incident, which was broadcast for the first time by Channel 4 News and appeared to contradict parts of a leaked police log about the spat.
Although there is no sound, the MP can be seen with his bicycle talking to three officers by the main gate for around 20 seconds. He then wheels it over to the side gate and exits.
The footage appears to show there were few members of the public passing by at the time - apparently contradicting police records.
Mr Mitchell demanded a full investigation into the police account of events and insisted the email was key to the loss of his job.
Downing Street said it received two emails via Mr Randall from his constituent, but after comparing the claims they contained with the evidence from CCTV cameras, Sir Jeremy decided that they were not "reliable".
Sir Jeremy did not look at the Downing Street police log as part of his review, the spokesman said. Asked whether Mr Cameron now thought that the Heywood review was flawed, the spokesman replied: "The Prime Minister's clear view is that reasonable inquiries were made."
Asked to account for the contradictions between the comments recorded in the police log and Mr Mitchell's recollection of what he said, the spokesman replied that there "clearly remains a genuine difference of view about what words were used".