Anti-terrorism police detained the 21-year-old Moroccan in the city of Brescia in the Lombardy region and seized documents in which the suspect allegedly incited Muslims to wage holy war against Italy and France.
The Moroccan faces charges of recruitment aimed at international terrorism and inciting racial, ethnic and religious hatred.
The suspect had created an 'Italian' branch of the grassroots jihadist movement Sharia4 via his blog, Sharia4Italy, according to investigators.
They said he had recently researched possible terror targets and expressed growing interest in the conflict in Syria, telling one online interlocutor he wanted to join jihadists there fighting to overthrow president Bashar al-Assad.
Internet played an important role in the Moroccan's alleged propaganda activities, which involved dissemination of jihadist material, police said.
The Moroccan had also used the internet to obtain instructions on the use of explosives, weapons and warfare techniques, according to police.
The suspect had developed a hatred of the west as a child following Al-Qaeda's 11 September 2001 attacks on the United States, when he was allegedly victimised and called a "terrorist" and "Taliban", investigators said.
The Sharia4 online network emerged in Belgium in 2010 and besides a number of websites has a several 'themed' channels on the popular video-sharing website YouTube.