Hajer Sailani, 43, also known as Akmad Hayas, was arrested on charges of kidnapping and illegal detention in connection with a 2001 hospital raid by the al-Qaeda-linked group, Lt. Col. Restituto Padilla, Air Force spokesman, said.
Sailani was nabbed in Barangay Maasin, a coastal village a few kilometers west of the headquarters here of the Armed Forces Southern Command.
Sailani had a P150,000 prize on his head.
Abu Sayyaf extremists occupied the government hospital in Lamitan, Basilan for a week shortly after abducting 17 Filipinos and three Americans from a resort in Puerto Princesa City, Palawan.
The resort raid in May 2001 was the start of a year-long kidnapping spree in which the Abu Sayyaf seized more than 100 people.
Some of the hostages were released after ransom was paid, others escaped and about 18 were killed.
One of the American captives, Guillermo Sobero, was beheaded in captivity, while missionary Martin Burnham was killed a year later during a shootout between the extremists and the military. Burnhams wife, Gracia, was wounded but survived the clash.
The groups founder, Abdurajak Janjalani, was killed in a police raid in December 1998. His brother, Khadaffy, took over.
The United States considers the Abu Sayyaf a terrorist organization. Roel Pareño, Sandy Araneta, Jaime Laude