The event took place in the middle of a busy street in the western city of Jeddah.
The teenager was questioned because he had displayed "improper public behaviour" and also disrupted traffic following a "confidential investigation", the Mecca Police said in a statement.
The video went viral in July past year, the BBC reported.
The footage was first posted past year, but his arrest was reported on Monday.
It is unclear whether the boy will be formally charged.
The country does not have a codified penal law, which gives officials and judges the right to arrest and punish children, according to BBC.
The vehicles all appear to be stopped at a red light as the boy busts each and every move easily - all while decked out in a striped t-shirt, gray Nike sports shorts, and Crocs. As he starts dancing to the tune of the famous 90s hit song in the middle of the crosswalk, five lanes of cars stopped at traffic light.
Last month, Saudi police briefly arrested a woman who appeared in an online video wearing an "indecent" skirt and crop top.
A teenage boy has been arrested in Saudi Arabia for dancing to the Macarena. Dabbing is outlawed in Saudi Arabia in accordance with the National Committee for Drug Control policy, Haaretz reports.