The G4S contractor is accused of spitting at the soldier and calling him a "baby killer," in an apparent reference to the war in Afghanistan.
"We are urgently investigating claims of an altercation between a security officer and a soldier," G4S said Monday in a statement. "We take any case of improper behaviour by a member of our staff very seriously.
"We do not tolerate insulting behaviour and, where necessary, appropriate disciplinary action will be taken."
The incident, first reported by The Sun newspaper on Monday, happened Saturday at Lord's cricket ground, the venue for archery, involving a soldier from the 35 Engineer Regiment.
"The matter was reported and is being investigated by G4S," Britain's defence ministry said. "This isolated occurrence is not indicative of the good working relationship between the military and G4S."
Thousands of members of the armed forces were deployed to protect the Olympics after G4S failed to hire enough staff, causing a national embarrassment for the firm.
Some of the servicemen called in on short notice have seen their leaves cancelled, while others have only recently returned from tours in Afghanistan.