The 41-year-old American tourist, whose name was not disclosed, was punched by a passerby after displaying the Nazi salute multiple times near a café in downtown Dresden.
The American also had insignia of "unconstitutional organizations, which includes Nazi symbols", Deutsche Welle reported.
The American was detained by German police. Germany has strict privacy laws around releasing the identities of individuals involved in criminal cases, and police on Sunday gave no information on his background.
He was punched by a passer by, who then fled the scene and is being sought by police for causing bodily harm. He is wanted for questioning by Dresden police.
The incident happened last morning as the tourist, who was "strongly under the influence of alcohol", left a bar in the eastern city's Neustadt area and repeatedly gave the Hitler salute on the street.
It's the second time in August that tourists have gotten themselves into legal trouble for giving the Nazi salute. They were later freed after posting a 500 Euro bail. Earlier this month, Switzerland's Supreme Court upheld the conviction of a man who appeared in 2013 photos making the Nazi salute outside a Geneva synagogue.