A video of the gathering, called the "Nude Sport Games 2014," first appeared on social media earlier this week and went viral. It shows participants frolicking on a secluded Penang beach in late May, engaged in a range of activities including body painting, dancing, relay races and various other contests, all in the nude.
In one scene, a woman is seen riding horseback on a man, while in another, a woman crawls over three men lying next to each other in the sand.
"A Malaysian woman was arrested Thursday to assist police in the investigation of the naked festival," Lai Fah Hin, local police chief in the northern state of Penang, told AFP. Lai said 18 people, most of them foreigners, took part and that police had learned the identities of 15 and were seeking them.
He would not specify whether the arrested Malaysian woman was a participant.
Those being sought include seven Malaysians, four Singaporeans, two Myanmar nationals, a Filipino and an Indian national, he said.
The gathering has been condemned by Muslim conservatives but also many non-Muslims, and triggered heated online exchanges between critics and supporters of the nudists. Lai said they could face up to five years in prison for taking part in an "obscene act."
About 60% of Malaysia's nearly 30 million people are Muslim ethnic Malays.