Nurul Izzah, 34, a member of parliament and People's Justice Party Vice President, was arrested on Monday under the country's Sedition Act.
Izzah is out on bail and would have to meet the police again in a month's time, her lawyer said R Sivarasa said.
Izzah was arrested for sedition after she last week read out in parliament text from a speech of her father criticising his recent conviction for sodomising a former male aide in 2008.
She read on behalf of her father, Ibrahim in Parliament and police deemed its content as seditious, for allegedly insulting the judiciary system of the country.
Speaking to reporters after her release she said the Inspector General of Police Khalid Abu Bakar had clearly misused his powers to detain her.
"As an MP I have immunity to speak in the parliament, there is no reason to arrest me after the speech," she added.
Izzah indicated that she is looking at legal recourse for the "unlawful arrest and detention" that she was subjected to.
"I maintain that my arrest and detention was completely unnecessary, malicious, unlawful and an assault on the institution of parliament," she said in a statement.
Izzah claimed that her arrest was a clear sign the government is desperate, and is resorting to cowardly tactics to intimidate the opposition.
Anwar, 67, was convicted on February 10 of sodomising a former male aide in 2008 and sentenced to five years in jail.
The case against Anwar was widely seen as a long-running politically campaign to eliminate any threats to the now 58-year-old ruling regime, whose popularity has been eroding after five decades of dominance.
The US had said it was "deeply concerned" by the detention of Nurul.

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