The baby girl, who is subject to child protection arrangements, was allegedly taken by her mother in the morning and a huge search took place to locate her.
The infant was taken from Heartlands Hospital in Birmingham at 8.30am and it took police 12 hours to find the child, officers said.
She was eventually discovered at a property in Sparkhill at 8.30pm last night, BirminghamLive reports.
Officers said both mother and child were found “safe and well”.
The 43-year-old mother is now in custody on suspicion of child abduction.
Earlier this afternoon two women were taken into custody for assisting an offender. They have been released pending further investigation.
Detective Inspector Neil Hunt led today’s operation for West Midlands Police.
He said: “It has been our absolute priority throughout the day to ensure the safety of the baby girl and I am happy to say that she has been well cared for.
“Sadly it has been necessary to arrest her mother, but we will be working with partner agencies to achieve the best outcome for the child.”