Raleigh police spokesman Jim Sughrue said a 26-year-old woman alleged that a man had committed a sexual act against her at the Ess Lounge, a downtown nightclub.
Kracker, 33, was arrested at a hotel in suburban Cary. He was being held at the Wake County Jail on a $5 million bond, Sughrue said.
Sughrue said police had obtained a warrant charging Kracker with second-degree forcible sex offense.
Kracker, whose real name is Matthew Shafer, was to appear in court Friday afternoon, said Wake County Sheriff's Office spokeswoman Phyllis Stevens.
A message left with his listed agency in Nashville, Tenn., wasn't immediately returned, and a phone number for his listed management company in Harrison Township, Mich., was disconnected.
Kracker's hits include "When the Sun Goes Down," a duet with Kenny Chesney. The 33-year-old rock-country musician has also won acclaim for "Follow Me" and a cover version of Dobie Gray's "Drift Away."