The Independent Office for Police Conduct (IOPC) has confirmed an officer captured on video appearing to punch a suspect several times is under criminal investigation.
The video of the incident in Porthmadog, Gwynedd, gained significant attention on social media when it emerged last month.
The IOPC said it had "notified a police constable that they are under criminal investigation and have served them a gross misconduct notice".
It said the development did "not necessarily mean that criminal or disciplinary proceedings will follow".
North Wales Police has suspended the officer while the investigation continues, the IOPC understands.
The force referred the incident to be independently investigated.
The IOPC said at around 11am on 10 May, two officers attended a reported disturbance in the town.
At around 11.50am a man was located by officers in the garden of a nearby house and he was arrested.
The footage, which was extensively shared on social media, appears to show an officer striking the man to his head a number of times while on the ground.
The same officer used incapacitant spray towards the man while he was placed in the back of a police van, the IOPC said.
The man appeared unwell while on the way to the police station and he received first aid.
He was taken by ambulance to hospital and later released into police custody.
As part of its investigation, the IOPC has examined video from police body-worn cameras as well as footage of the incident which was taken on a phone.
The investigation will consider whether the force used was "justifiable, proportionate and necessary", if the aftercare provided was "appropriate" and whether the officers acted in accordance with training and force policies and procedures.
The IOPC added that North Wales Police is cooperating fully with its investigation.
IOPC director David Ford said there had been "considerable interest and public concern over the footage".
"We are progressing our investigation in a thorough and timely manner, carefully securing and examining a range of evidence to establish what took place during the whole incident.
"We have also served a misconduct notice on another police constable concerning the level of care provided to the man after his arrest," he added.
North Wales Police said last month it was aware of the footage and a spokesperson added: "As this matter is subject of ongoing investigation the force will not be commenting further regarding this matter at this time."