Ms Sheehan, the mother of a soldier who was killed in Iraq last year, was led away in plastic handcuffs as she stood among a large crowd of people who had been warned they would be arrested.
More than 500 demonstrators had gathered on the sidewalk near the main entrance to the presidential mansion.
Each carried a board bearing the name of an American soldier killed in Iraq.
About 300 moved away after police warned that arrests would follow.
Police later said they had arrested 370 of the protesters.
As Ms Sheehan and the others were slowly led away to waiting buses and police trucks, activists behind police lines shouted: “The whole world is watching.”
Five women went topless carrying boards proclaiming: “War is indecent.”
Police said Ms Sheehan, who made her name by starting a peace camp outside of Bush’s Texas ranch, and the others were arrested for staging a demonstration in a restricted zone without a permit.
A police spokesman said: “A majority of them wanted to be arrested. They will be processed and received a court date.
Just a few miles away earlier in the day, forty-one other people were detained for blocking entrances to the Pentagon headquarters of the Defence Department, a military spokesman said.
The demonstrations followed an anti-war rally in Washington on Saturday, which attracted more than 100,000 people condemning the US military presence in Iraq.
But the White House shrugged off the demonstrations, saying opponents were free to speak out but would not change the president’s views.
Presidential spokesman Scott McClellan, when asked what effect Saturday’s crowds had on President George W Bush, replied: “I don’t know of any it had on him … We continued with our schedule.”
“The president just strongly disagrees with those who say we need to withdraw from the Middle East. That would be the wrong approach that would make us less safe and less secure,” he added.
“This is a global war that we’re engaged in. I know that there are some that would argue that we should withdraw from Afghanistan and that we should withdraw from Iraq and we should withdraw from the Middle East,” said Mr McClellan.