Acting on a tip-off, a team of police officials raided a spa in the Virar area of the district and arrested the 43-year-old Thai woman yesterday, Assistant Police Inspector SA Ingole said.
Two women, one of them from Thailand, were rescued during the raid, he said.
The accused woman was operating the flesh trade racket from the spa for the last one year, the police said.
The police sent a decoy to the spa and trapped the accused, they added.
The rescued women, aged 23 and 25, were sent to a shelter home in Boisar, the police said.
The accused woman was booked under the Immoral Traffic Prevention Act. She was produced before a local magistrate who remanded her to police custody till January 23, they added.