Senior Sergeant Anthony Bond, of Dunedin, said officers were called to Princes St at 12.05am on Saturday after a member of the public reported seeing multiple people running around tagging busses, vehicles and buildings.
Officers searched for the group, aged 30, 20, 21 and 19, and located them in Dowling St with silver paint covering their hands - the same colour paint used in the tags around the city.
They were also found in possession of paint pens and spray cans, Snr Sgt Bond said.
Officers identified 23 locations that had been graffitied and all four were arrested.
Police were making inquiries and checking nearby CCTV cameras.
Numerous charges were likely for the four - possibly one each for every instance of tagging, Snr Sgt Bond said.