Police seized Ali Hussein Ali, who is nicknamed “Trusted One”, and two accomplices in the coastal town of Malindi on Monday.
In a statement, the police said Ali had helped smuggle recruits to Islamic State in Libya where he has ties with a human trafficking ring, and to the al Shabaab militant group in Somalia. He also moved money around East Africa and beyond for Islamic State, police said.
Kenya has in recent years suffered a series of attacks by al Shabaab, which is waging an insurgency against the U.N.-backed government in Somalia, where Kenya has deployed peacekeepers.
Islamic State has also claimed at least two low-level attacks in Kenya.
Kenyan police said Ali was born in the Somali capital, Mogadishu, and moved to Kenya in 2010 under the guise of being a tourist. He then moved to Libya, via South Africa and Sudan, where he joined IS, before returning to Kenya last November, police added.
The two men he was arrested with are also suspected of having links to Islamic State and al Shabaab, the police said.