“Wannabe dictator speaks at the White House after having his political rival arrested,” the conservative network said in a chyron underneath a split screen showing Mr Biden and Mr Trump speaking separately after the former president's court appearance in Miami on Tuesday.
The provocative message comes as right-wing media outlets attempt to distract from Mr Trump's 37-count felony indictment over his alleged mishandling of state secrets.
They claim Mr Biden is corrupt and that he has ordered the political persecution of his rival ahead of the 2024 presidential election.
However, Mr Trump was indicted by people in a grand jury on criminal charges presented by an independent special counsel. There is no evidence Mr Biden had a role in the proceedings.
In addition, Mr Trump was not forcibly arrested as the Fox News messaging suggests, since he voluntarily turned himself in on Tuesday.
A Fox News representative said: "The chyron was taken down immediately and was addressed."
Mr Trump remains the front-runner for the Republican nomination by a large margin, even though he lost to Mr Biden by seven million votes in 2020 and continues to lie about the results.
Fox News has been struggling with a drop in ratings after parting ways with host Tucker Carlson, who left amid the fallout of a public relations disaster for the network concerning voting machine maker Dominion Voting Systems.
Dominion had filed a lawsuit arguing that Fox lied to viewers by claiming the voting machines were part of a conspiracy to overturn the 2020 election. Court filings show Fox staff knew the claims were bogus but aired them anyway. The network ended up paying Dominion $787.5 million in damages.
"There are probably about 787 million things that I can say about this,” White House Press Secretary Karine Jean-Pierre said at the daily briefing on Wednesday.
"That was wrong about what we saw last night."