A woman was hurt in the four-vehicle crash, which occurred on Friday afternoon, Los Angeles Police said.
Photos from the scene show a large SUV on top of three other vehicles at an intersection near his home in the upscale neighbourhood of Brentwood.
Police said that no arrest has been made and ruled out the involvement of drugs and alcohol.
The former California governor’s spokesman confirmed to the Los Angeles Times that he was driving the SUV when the incident occurred, but was not hurt.
Photos after the crash show the 74-year-old standing on the side of the road talking to the other drivers and police officers.
A police report, seen by CBS Los Angeles, said that Schwarzenegger was “near the intersection of Sunset Boulevard and Allenford Avenue, when a collision occurred with a red Prius making a u-turn as it continued through a ‘red arrow’ signal to turn left.”
It added that the SUV rolled on top of the red Prius and then ended up hitting two other vehicles.
Tabloid news site TMZ reported that the woman driving the Prius had head injuries and was taken to hospital, but her injuries are not thought to be life threatening.
“He is fine, his only concern right now is for the woman who was injured,” a representative told PEOPLE magazine.