The bomb disposal team made the item safe after they were called to the scene on Tuesday.
Police said a 39-year-old man has been arrested in connection with the incident.
A Police Scotland spokesman said: “We were called to the Palace of Holyroodhouse, Abbey Strand, Edinburgh, around 8.50pm on Tuesday, March 23, following a report of a suspicious item.
“Following examination by explosive ordnance disposal (EOD), it was made safe.
“A 39-year-old man has been arrested in connection with the incident. There was no threat to the public and enquiries are ongoing into the full circumstances.”
Updates to follow.