Thomas Markle will be subject to home detention and electronic tagging after appearing in court accused of possessing child sexual abuse material, including images of himself with naked young girls.
Travel restrictions were also imposed by the judge on the Duchess of Sussex's father, who did not enter a plea at the hearing in Tampa, Florida.
He has been bailed and was ordered to undergo a psychiatric exam, amid concerns he may not be unable to understand the proceedings or properly assist his lawyer.
A future court appearance in California is not due for at least several weeks, according to the US justice department.
Meghan's 82-year-old father was arrested at the Maravida Senior Living care home in Lakeland near Tampa, Florida, on Thursday, having returned to the state to recuperate from a recent medical treatment. He was pictured in a wheelchair being led away by FBI agents.
First Assistant U.S. Attorney for California Bill Essayli announced Markle Snr's arrest in X and posted a copy of the criminal complaint levelled against him, adding that if found guilty, he faces a maximum sentence of 20 years in federal prison.
FBI special agents raided two storage units allegedly rented by the suspect in the Los Angeles area and had recovered 78 items that allegedly contained child sexual abuse material, including three alleged images of Markle Snr with underage girls.
Two of the images allegedly depict an adult man – whom a witness "positively identified" as Markle – with a nude young girl.
In one of them, according to court documents, the man "appears to be in the age range of 30s to 40s", which suggests the alleged abuse dates back decades given Markle is now 82.
A third image is said to show a nude young girl in a room that appears to be part of a motel chain in the Philippines.
Other photographs allegedly show Markle with children in various stages of undress.
"These allegations are serious and disturbing," Essayli wrote. "We intend to prosecute Markle to the fullest extent of federal law."
FBI Director Kash Patel said in an accompanying statement: "Mr. Markle allegedly targeted innocent children and sought to steal their innocence through his criminal actions. Working with our Justice Department partners, our agents moved quickly, identified and located the explicit material, and arrested Mr. Markle in Florida.
"This FBI will use every single resource at our disposal to protect innocent kids – any predator who targets children will have zero safe haven in this country or anywhere they try to hide."
The duchess's father was reported to police in the Philippines and to the FBI last month by his son, Thomas Markle Jnr, 60, who handed over a haul of alleged child abuse images he found in his father's belongings in Cebu City, where an investigation is underway.
A second alleged hoard was discovered last week in a storage unit Markle Snr is said to have rented near his former home in Rosarito, Mexico, during a raid by Mexican police.
Markle Snr, a retired television lighting and photography director, has admitted to paying for sex in the Philippines but denied ever possessing child abuse imagery, calling the accusations by his son "sick lies."
Meghan said last month she was left "deeply distressed" at the allegations and revealed she was sent a letter via the Metropolitan Police and Royalty and Specialist Protection seven years ago that made "troubling and disturbing allegations" about her father. She was given assurances these were being investigated, she said.
The Metropolitan Police has admitted it never shared the details with other law enforcement agencies, and the police watchdog, the Independent Office for Police Conduct, is now investigating its conduct.
The duchess had wanted to "speak out" immediately after reading the letter but police advised her against doing so, sources said.
The Independent reached out to the Metropolitan Police for comment. The DOJ directed us to the FBI's statement while Buckingham Palace and the duchess both declined to comment.
Addressing the allegations against her father, from whom she is estranged, the duchess said last month: "I hope it can now be understood that, despite certain media publications' distortion over the years, any distance from my father and my choice to not allow him to have contact with our children was for one reason: to protect them.
"Although the breadth of what has now been uncovered is more sickening than one could ever imagine, my sincerest hope is that justice will be fully served and that the priority remains the safety and protection of innocent children."
On Thursday, the Philippines' interior secretary, Jonvic Remulla, said that Mr Markle Jnr, the duchess's half-brother, had been named as a person of interest in its investigation into his father.
"There are indications suggesting that the son may also be involved in the crime," he said at a press conference in Manila. "But only as a person of interest so far, he is not yet treated as a suspect. We will know in the next few days."
According to Remulla, more than 7,000 photos and one video – all of underage males and females of Asian, Latin and European descent, with some as young as 10 and 11 – were uncovered among Mr Markle Snr's possessions.
He described the images as "the most deplorable displays of impunity towards sexual activity that I have ever seen."
If you are a child and you need help because something has happened to you, you can call Childline free of charge on 0800 1111. You can also call the NSPCC if you are an adult and you are worried about a child, on 0808 800 5000. The National Association for People Abused in Childhood (Napac) offers support for adults on 0808 801 0331
