It's the second time this year Hilton has been arrested on drug possession allegations, although authorities in South Africa dropped marijuana charges earlier this summer. In 2007, Hilton pleaded no contest to alcohol-related reckless driving and was sentenced to 45 days in jail.
This time, the hotel heiress was with her boyfriend, Las Vegas nightclub mogul Cy Waits, who manages a club inside the Wynn Las Vegas and was driving the black SUV that the officer stopped nearby at 11:22 p.m. Friday.
The officer "followed the vapor trail and the odor of marijuana to the Escalade," police Sgt. John Sheahan said.
As other police arrived and a crowd gathered on the busy neon-lit Strip, Hilton asked to go into the Wynn resort for privacy, Sheahan said.
"Miss Hilton pulled out a tube of lip balm," Sheahan said. "At the same time ... a bindle of cocaine in a plastic bag came out of her purse" in plain view of police in the room.
Police Officer Marcus Martin characterized the cocaine as a "small amount," or a package of the size usually associated with personal use. Police would not specify the weight of the cocaine or whether any marijuana was confiscated.
Hilton was arrested on suspicion of felony cocaine possession. If convicted of the low-grade felony, she would get probation, but any violation of that probation would be punishable by up to one to four years in Nevada state prison.
Waits, 34, was arrested on suspicion of misdemeanor driving under the influence of alcohol or drugs. Misdemeanors are punishable by up to a year in county jail. Police said he owned the 2009 Cadillac.
Hilton and Waits were booked into the Clark County jail, where Sheahan said Hilton was kept handcuffed on a booking room bench, fingerprinted, photographed and released without bail about 2:45 a.m. Saturday.
Waits' lawyer, Richard Schonfeld, said Waits posted $2,000 bail Saturday. Waits was released Saturday afternoon.
Sheahan said Hilton was not taken to a cell and received no special treatment on a busy Friday night and Saturday morning at the jail. He said release without bail was common in such cases.
Hilton, a prolific tweeter, didn't mention the arrest on her Twitter site, although less than an hour after she was released her account was updated with a posting that said the actress was in bed watching the television show "Family Guy."
It was unclear if the tweets came from her, were posted by time-release or were sent by someone else. Hilton spokeswoman Dawn Miller wouldn't comment when reached by an Associated Press reporter Saturday afternoon.
Hilton's attorney, David Chesnoff, told The Associated Press on Saturday morning that he was still gathering facts about the arrest.
"This matter will be dealt with in the courts not in the media and I encourage people not to rush to judgment until all of the facts have been dealt with in a court of law," Chesnoff said later in a statement. "There will be no interviews and no more comments at this time."
Schonfeld said he was "troubled by the circumstances" leading to the arrest, but declined to specify his concerns.
"As the case proceeds, a lot of facts are going to come to light that will ultimately lead to exoneration," Schonfeld said. Court dates for Hilton and Waits were not immediately available. Clark County District Attorney David Roger declined to comment Saturday about the case.
A spokeswoman for Wynn Resorts in Las Vegas did not immediately respond to messages seeking comment.
Waits and his twin brother, Jesse, are managing partners of the Tryst Nightclub inside Wynn Las Vegas, Drai's after hours club at Bill's Gamblin' Hall & Saloon, and XS The Nightclub at Wynn's Encore resort. A spokeswoman for Harrah's resorts declined immediate comment.
Earlier this week, Hilton was in the news when a 31-year-old man allegedly tried to break into her Los Angeles home.
Authorities have said that someone carrying two big knives banged on Hilton's window Tuesday. She posted a photo of the arrest on Twitter and described it as "scary." Nathan Lee Parada faces a felony burglary charge.
Hilton was arrested this summer after the Brazil-Netherlands World Cup match in Port Elizabeth, South Africa, on suspicion of possession of marijuana. The case was then dropped at a midnight court hearing.
Hilton pleaded no contest in 2007 to alcohol-related reckless driving and was sentenced to 45 days in jail. After spending about 23 days in jail, Hilton told CNN host Larry King that the experience caused her to re-evaluate the role partying played in her life. She said she wanted "to help raise money for kids and for breast cancer and multiple sclerosis."
While most famous for her tabloid exploits and reality TV series "The Simple Life," Hilton has appeared in the films "Bottoms Up," "The Hottie & the Nottie" and "House of Wax."
AP staff writers Oskar Garcia and Jeff Wilson in Las Vegas, Robert Seavey in Phoenix and AP entertainment writer Anthony McCartney in Los Angeles contributed to this report.