Haywood County sheriff's deputies found the victims' bodies about 10 p.m. Thursday in a home on Rabbit Skin Road, just off Interstate 40 about 10 miles north of Waynesville, said Chief Deputy Jimmy Parton.
Friday morning, a suspect was arrested in Haywood County, Parton said. He provided no details.
Authorities did not release the victim's names, but a neighbor, Rita Messer, said they were Cora and Earl Phillips, a couple in their 70s; their son Eddie, 40; their daughter-in-law, Mitzi, 42; and their granddaughter Katie, a Waynesville Middle School student.
"They're good people, they were churchgoing people, they never harmed nobody," Messer told The Associated Press in a telephone interview. "It's awful, you ain't safe in your own home, you're not safe in church. I don't know what this world is coming to."
"This is all my family," Leroy Owens, a nephew of Earl Phillips, told the Asheville Citizen-Times. He said the family had buried his mother earlier this week.
The elder Phillipses were retired. Eddie Phillips was a dump truck driver, and Mitzi Phillips worked at a textile plant, and operated a beauty shop in her home, relatives said.
Neighbors said the victims were shot shortly after returning home from a local fair.
Sheriff's officials said two suspects were seen leaving the victims' home in a car. They were described as white men between the ages of 19 and 25.
Messer said her brother, Danny Ray Messer, was going to the store Thursday night when he saw Earl Phillips' truck overturned on an embankment. Thinking the truck had rolled out of the Phillips' gravel driveway, Messer went to the family's house, an old, green, ranch-style home sitting just off I-40.
"He went up to tell them, and there they were," a shaken Messer said.
Mitzi Phillips' Chevy Cavalier was found wrecked on I-40 about 18 miles from the Tennesse border, Messer said.
Another truck found near victims' home was reported stolen in Iredell County, about 100 miles east of the murder scene, earlier Thursday, the sheriff's office said.