Yonhap News Agency said the brothel took up the entirety of a nine-story hotel and bar in southern Seoul.
Police arrested the brothel's owner, booked 19 other individuals who bought or sold sex in the building, and said they are seeking a warrant to arrest the brothel operator, Jung.
Officials said Jung and two others opened two bars and a hotel in the building in June in the Gangnam district, employing about 100 female employees who offered sex for $312 per service.
Yonhap said the building operators earned $220,000 a day.
"A building that has bars and places for prostitution at the same time is not common," a police official said. "We are looking into whether the owner of the bar and hotel is the same person and whether this place is purposely made for prostitution."