The drawing, valued at $275,000 (£172,000), was taken from the Weinstein gallery by a man wearing dark glasses. He was filmed by security cameras leaving the scene in a taxi.
A suspect, named as Mark Lugo, 30, has been taken into custody.
He was arrested at a hotel in Napa, California, where the artwork was found, police said.
He faces several charges, including theft and possession of stolen property.
Pablo Picasso created the pencil drawing, entitled Tete de Femme, in 1965.
It was found without its frame.
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