Thames Valley Police has confirmed there was a burglary at Blenheim Palace, in Oxfordshire, and said on Saturday afternoon that the toilet - part of an exhibition by Italian conceptual artist Maurizio Cattelan was taken.
Detective Inspector Jess Milne said: "The piece of art that has been stolen is a high value toilet made out of gold that was on display at the palace.
"The artwork has not been recovered at this time, but we are conducting a thorough investigation to find it and bring those responsible to justice."
The exhibition opened on Thursday.
Visitors had to book a time slot for the fully functioning loo in advance and told to respect the three minute rule, imposed to reduce queuing times.
A 66-year-old man has been arrested in connection with the incident.
The Palace has suffered significant damage and flooding following the burglary, because the loo, designed by Italian artist Maurizio Cattelan, had been plumbed in and was available for visitors to use.
Last month, ahead of the toilet's installation, the Duke of Marlborough's half-brother, Edward Spencer-Churchill, said the lavatory wouldn't be "the easiest thing to nick".
Mr Spencer-Churchill told the Times: ""Firstly, it's plumbed in and secondly, a potential thief will have no idea who last used the toilet or what they ate.
"So no, I don't plan to be guarding it."
Blenheim Palace was closed on Saturday following the burglary.
EventSite Design, who work at the site, said on Twitter: "We've had some drama overnight which I won't elaborate on just yet but it has meant we need to redirect our contractor traffic for the day."
Cattelan's exhibition is scheduled to run at World Heritage Site Blenheim Palace from September 12 until October 27, with tickets costing £27.
Blenheim Palace chief executive Dominic Hare urged anyone with any information to contact police.
He said: "We are saddened by this extraordinary event, but also relieved no-one was hurt.
"We are very grateful to our staff and to Thames Valley Police for their rapid and brave reactions.
"We knew there was huge interest in the Maurizio Cattelan contemporary art exhibition, with many set to come and enjoy the installations.
"It's therefore a great shame an item so precious has been taken, but we still have so many fascinating treasures in the palace and the remaining items of the exhibition to share.
"The investigation continues, but it will be business as usual from tomorrow, so visitors can continue to come and experience all we have to offer.
"If anyone knows or saw anything suspicious in connection with the event that may help us secure its return please contact Thames Valley Police."
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