An 18-year-old man has been arrested in connection to upsetting posters plastered around Queenstown, including at a brand-new Islamic Centre.
The teenager appeared in the Queenstown District Court on Thursday, charged with possession of a knife, Southern District Commander Superintendent Paul Basham said in a statement.
Further charges are expected to be laid at a later date.
According to a witness, the posters bore images of Islam's prophet Muhammad, taken from satirical French magazine Charlie Hebdo, and reportedly included sexist and anti-Islamic messages.
Images of the prophet are frowned upon by many Muslims, and in 2015, 12 Charlie Hebdo staff were killed in a reprisal attack by Muslim extremists.
The posters, which appeared at the Gorge Rd site on Tuesday, were quickly removed by locals.
"We know incidents like this are upsetting for our community and we'd like to thank Queenstown residents for the information they have provided to assist our enquiries," Basham said.
Speaking to Newshub on Wednesday, Queenstown Mayor Jim Boult described the alleged offender as "disgusting".
"I'm extremely disappointed and unhappy that there's people out there who think this is okay," Boult said.
"I use the word 'people' reservedly. These are just disgusting individuals."
Boult said he believes it was an isolated incident.
"We are a very inclusive community - there are 47 different nationalities in our high school here. Our community enjoys and embraces the fact we have so many different beliefs and nationalities here, so this is foreign to us."
The Islamic Centre officially opened its doors less than two weeks ago on December 11.
Anyone that has any further information in relation to these incidents or the arrest is asked to contact Queenstown Police on 105.