Australian team chief Nick Green said 21-year-old Josh Booth fainted while at the police station and was taken to a hospital.
He was released a short time later and was not charged by police in the incident that occured about 12 hours after he competed in the men's eight at the Olympic rowing basin at Windsor outside London.
"We understand there was alcohol involved," said Green, who received a phone call from police at 3 a.m. at the athletes village.
"No charges have been laid. He has to go back to the police station tomorrow where the police will ... investigate the matter and make some outcomes out of those investigations. We'll let the investigation unfold."
Green said he wouldn't speculate about possible disciplinary action until he gets more detail of the incident.
Making his Olympic debut, Booth was on the Australian crew which finished sixth in the men's eight.
Before the games, the Australian Olympic Committee said it wanted to finish in the top five of both the gold and overall medal counts at London, but it is lagging far behind in that projection.
With roughly one-quarter — 73 of 302 — events completed through five days of competition, Australia had only one gold medal, six silvers and two bronze. That left the Aussies equal 15th in golds and level for ninth in the overall medal count before competition began Thursday.
The biggest disappointment for the Australians has been in the Olympic pool, where they're fifth in the medals tables and have had several big failures. In 2008, they finished second in medals and their women's team won six golds in the pool.
The biggest misfires include highly favoured James "The Missile" Magnussen in the 100-meter freestyle and the Australian men's 4x100-meter freestyle relay.
"There were times after the relay that I wanted to go away and hide and forget about these Olympics," Magnussen said. "To get knocked down again, it's tough."
Also, Stephanie Rice failed to defend both her individual medley titles and the women's 4x200 freestyle relay team, also defending the gold they won in Beijing, lost their lead on the final lap and had to settle for silver on Wednesday.