The 22-year-old man is believed to have scaled the front gates of the palace entrance by The Mall.
He did, however, have a chance to begin banging on the doors of the royal residence as it took around four minutes for police to apprehend him due to their assessing whether or not he had a weapon. The police also noted that incident isn't being investigated as terrorism.
The Queen was in residence at the time, a palace spokeswoman confirmed.
A Metropolitian Police spokesman said: "Officers have arrested a man on suspicion of trespass, contrary to section 128 of the Serious Organised Crime and Police Act 2005".More news: Super Mario Maker 2 Now Has Two Million User-Made Levels
The intruder was not carrying a weapon and the incident is not being treated as terror-related, the force said.
"He remains in custody at a central London police station".
There are fears the man was attempting a copycat operation to Michael Fagan who was famously able to enter the Queen's bedroom nearly 37 years ago to the day.
The royal standard flag was flying at the Palace, prompting the suggestion the intruder knew the Queen was at home and may have been trying to access her bedroom.
Prince Andrew said: "The police have a hard job to do balancing security for the Royal Family and deterring intruders, and sometimes they get it wrong. It's very unusual given the infamous Fagan business almost 37 years ago", the source says. What about heat censors and CCTV?More news: Indonesia to return 210 tonnes of Aussie trash
No members of the royal family were at the palace at the time, and the man, who was found shortly before 10.30pm "in an area now open to the public during the day", was arrested for burglary, trespass and criminal damage.
Buckingham Palace is yet to comment on the matter.
The freaky conversation saw the 31-year-old schizophrenic tell the Queen about his family problems.
She then telephoned the switchboard but the operator thought it was another member of staff playing a joke and replied: "Yes, dear, you're the Queen, we'll send someone up!"
During the incident Fagan smashed a large glass ashtray and threatened to slash his wrists.More news: Khawaja ruled out of WC with hamstring injury
The Queen managed to raise the alarm when Fagan asked for a cigarette, allowing her to call for a footman who held him until police arrived.