The former Bosnian Serb leader was arrested late on Monday on genocide charges after 11 years on the run. The arrest of the man who had topped the UN tribunal's most-wanted list was announced on Tuesday.
"Karadzic practiced alternative medicine, earning money in a private clinic in Belgrade's new district," Rasim Ljajic, head of Serbia's national council for cooperation with the UN war crimes tribunal, told a news briefing.
Ljajic said Karadzic, a certified psychiatrist, had used a false identity and moved freely in the city. He showed a photo of the former leader with white hair, a long white beard and glasses.
War crimes prosecutor Vladimir Vukcevic said the fugitive's new identity was very convincing and did not raise suspicions among people around him.
Serbia's B92 channel reported that Karadzic could have published at least one article in a medical journal. The channel quoted the edition's chief editor as saying he had published an article by a man who resembles Karadzic as shown on the photo displayed on Tuesday.
Vukcevic and Ljajic said Serbian security services had found the fugitive while looking for another high-profile war crimes suspect, General Ratko Mladic.
Mladic led troops during the 1995 Srebrenica massacre, ordered by Karadzic, when about 8,000 Muslim men and boys were killed. Karadzic was also held responsible for the deaths of 12,000 people during the almost four-year long siege of Sarajevo.
Karadzic, 63, was arrested in a Belgrade suburb, while changing locations, Ljajic said.
Serbian media said on Tuesday, citing unofficial sources, that the security services had spotted Karadzic a month ago.