Law enforcement officials tell TMZ ... cops originally responded to a call about a disturbance in Hiltz's West Hollywood apartment.
After cops checked out the situation, officers made the decision to arrest Hiltz and take the minor child into protective custody. The 32-year-old actress was taken to a nearby station where she was booked on suspicion of misdemeanor child neglect around 3:30 AM.
Hiltz has since been released from custody.
Hiltz's attorney tells TMZ, "It was an unfortunate misunderstanding. No charges have been filed and absolutely no harm was done to the child."