The slaying Monday of Richard Jameson was the first fatal paramilitary-linked shooting in Northern Ireland since July, and threatens to re-ignite a bitter feud within militant Protestant ranks.
Police said those arrested Tuesday included prominent figures within the Loyalist Volunteer Force, a small pro-British gang.
The senior police officer in Portadown, Assistant Chief Constable Tom Craig, declined to specify how many people were arrested, but promised to conduct "a thorough and painstaking murder investigation."
Jameson was killed when a lone gunman shot him at close range outside his home Monday.
Ulster Unionist Party leader David Trimble, the leader of Northern Ireland's new Protestant-Catholic government, visited Jameson's home Tuesday near the hard-line Protestant town of Portadown. He met with Jameson's widow and three children, who asked that there be no retaliation for the killing, Trimble said.
"I would appeal to people to leave it to the police to investigate this murder and I would appeal to the community to be calm," he said.
Police said Jameson was the Portadown commander of the Ulster Volunteer Force, an outlawed pro-British group that has been observing a cease-fire since 1994.
The rival Loyalist Volunteer Force was founded in 1996 by Ulster Volunteer Force dissidents from Portadown who hoped to unravel the cease-fire. The Loyalist Volunteer Force spent more than a year killing Catholics at random, then called a cease-fire in 1998.
Tensions in Portadown between the two groups have frequently triggered fights, most recently on Dec. 26, when Jameson was among a dozen men hospitalized after a brawl in a soccer supporters' club.
Both groups are involved in running criminal rackets ranging from extortion to drug dealing. In reward for their cease-fires, however, their convicted members have been winning early paroles from the British government under terms of the Good Friday peace accord of 1998. All are supposed to be free by July.