The 20-year-old said the bus approached a border-patrol checkpoint just outside Las Cruces, N.M., not long after midnight when agents boarded and began asking people to show proper documentation to prove their legal status.
"They said, 'Show me your papers,'" Morales said. "I thought, 'I've been through this before.'"
He said he refused to answer their questions and the situation escalated to the point where the agents detained him for further questioning.
Border Patrol spokesman Douglas Mosier said Morales was never arrested.
"During questioning by agents, it was determined that he was illegally in the United States," Mosier said. "Records checks were conducted and indicated that he had previously been granted prosecutorial discretion by ICE in Salt Lake City. Mr. Morales was subsequently released."
Aaron Tarin, a Salt Lake City immigration attorney, said Border Patrol has "broader discretion" in detaining people at the border.
"In many cases they can detain and question without probable cause in order to verify immigration status," Tarin said. "A person can always refuse to answer, but that doesn't mean ICE could not initiate removal proceedings."
Morales recently relocated from West Valley City to Albuquerque to work as an immigration activist and was working on a documentary about his belief that Greyhound is complicit in working with the Border Patrol to deport people. He said he was filming at the time of his detention, which he said lasted about four hours.
By late Wednesday afternoon, Morales was on his way to Phoenix to stage a protest at the Greyhound station there before moving onto Los Angeles though he said he is not just targeting Greyhound.
"I am not fighting a bus company," he wrote on his Facebook page. "I'm fighting the injustice within that company and I never want anyone to go through what I went through because of Greyhound Bus Line."
Maureen Richmond, spokeswoman for Greyhound, said it's untrue that the company coordinates with the government on deportations.
"We don't profile the passengers, we do not have a connection to Border Patrol. We certainly do not call them or invite them to the facility, but if they do show up, we would certainly permit them what they need," she said.
For months after his arrest and release in 2011, Morales had kept a low profile until joining The Salt Lake Dream Team an activist group working to get legislation passed that would allow children of illegal immigrants to attend college and have a pathway to naturalization by meeting a set of standards.
Earlier this month, President Barack Obama issued an executive order to put the Dream Act into effect by allowing those who have been in the country for more than five years and are between the ages of 16 and 29 to attend school and obtain work permits.
Morales, who had been a student at Salt Lake Community College and had hoped to be eligible for the Dream Act, dropped out because he couldn't afford to go to school anymore. For the past month, he's been living in New Mexico and working at a local church in Albuquerque.