RIYADH, Saudi Arabia—Prince Alwaleed bin Talal has made a $300 million investment in Twitter Inc., expanding his media empire into social-media sites and giving the Saudi billionaire a stake in an online forum that was widely used by activists in this year's Arab uprisings.

The investment was made several months ago when existing Twitter shareholders sold $400 million of shares, according to people familiar with the matter. At the time, Twitter also raised $400 million from a direct investment led by Russia-based DST Global,...