Saif, who had been on the run since the National Transitional Committee took over Tripoli in August, was captured in the southern town of Obari and flown to Zintan in the north, the BBC reported.
Gadhafi's son is wanted by the International Criminal Court for alleged crimes against humanity during the uprising against his father. He was the last key member of the former leader's family to be killed or captured.
Saif was captured with several others as they tried to escape to Niger, said Wisam Dughaly, a commander of the Zintan militia. Dughaly said Saif was not injured during his capture.
Saif al-Islam is the second-oldest son born to Gadhafi's second wife. He was widely seen as the successor to his father, who was killed by transitional forces Oct. 20 as part of the pro-democracy conflict that began in February.
Last month, international prosecutor Luis Moreno-Ocampo said court officials had held talks with Saif about surrendering, but there had been no consensus, Voice of America said.
Moreno-Ocampo said he is traveling to Libya for talks on where Saif's trial will be held, adding, "The news is Saif will get justice. Where and how, that we will discuss," The BBC reported.
Saif's capture leaves Abdallah Senoussi, Gadhafi's former intelligence chief, as the only key Libyan official to be still at large.