The 38-year-old rapper, whose real name is Dwight Grant, was a passenger in a car pulled over on Interstate 95 in Tinicum Township, Delaware County, just south of his hometown of Philadelphia.
Police said they found a gun in the car's console. Both Sigel and driver Gerald Andrews are felons banned from having such weapons, according to troopers.
Police say they searched Sigel's pockets and say they found codeine syrup and some pills wrapped in cellophane. It's a combination known on the streets as pancakes and syrup.
Andrews was also carrying several prescription bottles and a small amount of marijuana, police said.
When Action News reporter David Henry asked Sigel what happened, Sigel said "I was in my bed last night."
Sigel had been originally scheduled to report to prison on Tuesday on federal income tax evasion charges.
However, the judge gave him an extra two weeks to allow him to release and promote his new CD, "This Time." Sigel was doing just that in New York on Tuesday.
But, early this morning, police say he was on the highway with drugs and a gun.
Court records indicate Sigel and Andrews both face drug and gun charges and were unable to post $300,000 bail.
Chris Schwartz, the chief executive for Ruffhouse Records, which released "This Time," said in a statement that the company is disappointed in Sigel's arrest. But he added that the rapper has displayed "the utmost professionalism in all of the initiatives related to the promotion of his new release."
"Beanie has obviously been struggling with some personal issues, and we continue to support him now and throughout his impending incarceration," Schwartz said.
Some young fans snapped pictures as he was led to a prison van on Wednesday.
"He's a good rapper. He speaks about his life, he speaks the truth. Sad to see this happen," said Malika Johnson of Folcroft.
Sigel is scheduled to begin a two-year prison sentence on Sept. 12 for failing to pay federal taxes. Prosecutors said he owes more than $700,000 for the tax years 1999 through 2005.