The former X Factor judge was taken into custody on Tuesday (4 June) following a newspaper investigation at the weekend, which alleged she introduced an undercover reporter to a drug dealing contact of hers, who then provided £800 worth of cocaine to the journalist.
A Scotland Yard spokesperson said: "Officers have today arrested two people, a 35-year-old man and a 24-year-old woman, by appointment at a central London police station on suspicion of being concerned in the supply of class A drugs."
Police have now confirmed Tulisa and the 35-year-old man have been released on bail until a date in July.
N-Dubz singer Tulisa, who announced she was leaving X Factor last month, became embroiled in the drug allegations at the weekend, when The Sun on Sunday accused her of arranging a meeting for their reporter with a drug dealer.
Tulisa was quoted as telling the reporter: "Half the guys I know are drug dealers. One's a massive cocaine dealer. He's my best friend. He's a gangster — he's my gangster."
The 'Young' singer – who does not take cocaine herself – is said to have explained to the reporter that she had developed a code for talking about drugs, which she calls "sweets". She would allegedly refer to a different coloured sweet depending on what drug she was talking about.
Tulisa, 24, hasn't made any comment since the allegations surfaced, but reports were rife that police would pay her a visit after speaking with the reporter involved.
Her reps have yet to make a comment.
> Tulisa remains silent following drug allegations
> TOWIE cast partied with Tulisa in Marbella