The bike, used in the prologue and valued at more than $10,000 (£7,060), was taken from a team truck in Sacramento along with other road bikes.
A local resident brought the Trek Livestrong 1274 to police headquarters in Sacramaneto on Wednesday.
The man is not considered a suspect and no arrests have yet been made.
Armstrong, 37, had posted a picture of his stolen bike on the social networking site Twitter, and more than 900 people had enlisted in a search for the bike through a Facebook group "1 Million Citizens Looking for Lance Armstrong's Stolen Bike".
"They recovered the bike!" Armstrong said on Twitter on Wednesday.
"Don't have details yet but it's apparently on it's way here. Thanks to the Sacramento P D for the help!"
Sergeant Norm Leong of the Sacramento police force said: "All the technology involved really kept the story alive and moving.
"It was clear that most of the people in the community were looking for this bike. It makes it hard to transport the thing; you can't ride it or sell it, it is that hot of an item."
Armstrong is competing in the US for the first time since his return from retirement.
The American's appearance in the Tour Down Under in Australia in January marked his first race since his final 2005 Tour de France triumph.
The Tour of California continues his build-up to a European campaign which is set to include the Giro d'Italia and the Tour de France.
Source: BBC News/ Sports- Cycling