"We are aware of an incident which is reported to have taken place in Derby last night and we are currently investigating," an ECB spokesperson said.
"We will provide a further update when possible."
Videos circulating on social media appear to show the Durham bowler in handcuffs being led away from a nightclub by police officers.
Carse is part of England's squad for the second Test against Pakistan starting next week at Lord's.
He was not on England duty at the time of the alleged incident after being an unused member of the squad for the first Test which England won comfortably at Headingley.
The investigation comes five days after England's returning Test captain Joe Root spoke of the players being "really good role models and human beings" after a series of incidents and accusations of a drinking culture.
Controversy has followed England around in recent times with off-field issues during last winter's tours, including Harry Brook being fined Stg 30,000 ($A57,000) following an altercation with a bouncer in New Zealand as well as reports of drinking during a mid-Ashes trip to Noosa.
This summer Ben Stokes broke a team curfew along with Gus Atkinson, with the pair dropped from the second test against New Zealand at the Oval.
Former Test captain Stokes eventually announced his retirement from international cricket while Brendon McCullum was sacked as Test coach.
The ECB would not confirm whether Carse was still in the squad for the second Test against Pakistan.
In 2024, South Africa-born Carse was suspended from cricket for three months for historic betting offences.
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