The 41-year-old former police chief of Bosanski Samac, on the border with Croatia, was arrested without incident, apparently by American troops.
The sudden display of Western resolve against war crime suspects, most of whom are Serbs, may have been timed to coincide with the start of a one-day tour of Bosnia by the US Defense Secretary, William Cohen.
His visit starts days after the election of a hardline Serb nationalist to the presidency of the Serb-ruled half of Bosnia.
Western diplomats fear that Nikola Poplasen will halt the fitful co-operation with the West undertaken by his predecessor, Biljana Plavsic. Mr Poplasen is an ally of the ultra-nationalist Radical party in Serbia. This is led by Vojislav Seselj, who is linked to many of the atrocities in Bosnia and Croatia from 1992 to 1995.
Javier Solana, secretary-general of Nato, said the latest arrest was "yet another warning to all those indicted for war crimes who are still at large that they will not escape justice".
Todorovic was due to be transported to The Hague last night, where he could appear in the dock as early as today. He is the ninth indicted suspect to be picked up in Bosnia by Nato peace-keeping forces, and the 26th suspect in custody out of 58 suspects indicted.Reuse content