The suspect — a Swedish man described by a television station as a 35-year-old drifter — was detained Tuesday night near a restaurant in Solna, police spokeswoman Stina Wessling said. He was not identified further.
"The man was informed of our suspicions of him being guilty of the murder and answered a few questions. He was also examined by medical examiners and forensic laboratory technicians," Wessling said.
She refused to say whether the man had confessed to or denied the accusations.
She did not reveal any further details of the arrest, but media reports said the suspect was watching a soccer game on television in the restaurant. After the first half, he stepped out for some fresh air when two plainclothes policemen arrested him, the newspaper Aftonbladet reported.
Wessling said the suspect looks similar to the man in a picture circulated in a nationwide alert.
The suspect's DNA will be tested to see if it matches genetic material recovered from a baseball cap found near the scene. Police also recovered DNA from the knife used by the attacker, but the amount was too small for immediate use. Wessling said she did not know when the results would be available.
Lindh, who did not have bodyguards, was stabbed several times in the stomach, chest and arm in an upscale Stockholm department store on Sept. 10, and died the next day after several hours of surgery. Her death cast a shadow over the weekend referendum in which Swedes rejected the euro. Lindh was a leading proponent of adopting the common European currency.
Authorities have said, however, that the attack did not appear to be politically motivated.
Despite the breakthrough, Wessling stressed that the investigation continues and that there are at least five more people being sought.
"We are very happy that we got hold of this person so quickly, which makes things easier for us. At the same time, one must remember that he is not pointed out as a killer. There are other persons who are still of immediate interest in the investigation," Wessling said in a radio interview earlier Wednesday.
Until Tuesday, police had made no arrests, prompting comparisons to the unsolved slaying of Prime Minister Olof Palme in 1986.
Police spokesman Leif Jennekvist said two other men were taken in for questioning, but were not considered suspects. He added that family members of the suspect were also questioned.
Authorities had issued a nationwide alert for the killer, including photos from the surveillance camera at the Nordiska Kompaniet department store showing a suspected attacker clad in a baseball cap and gray hooded Nike sweatshirt.
The Swedish news agency TT, citing a police source, said the suspect had previously been convicted of illegally owning a knife, as well as theft and vandalism. TT said the man, whom it didn't identify, spent eight months in jail for fraud.
The news agency also reported that the man didn't have a permanent home and had been moving around Stockholm. Citing court records, TT said the man claimed to have problems with alcohol and cocaine.
A memorial for Lindh was scheduled for Friday. Leaders from Britain, Finland, Norway and Denmark said they would attend, along with Secretary of State Colin Powell.
Lindh's murder also overshadowed Tuesday's opening of parliament. The house speaker, Bjoern von Sydow, told lawmakers that Lindh's killing had sent an icy wind sweeping over Sweden.
"The cold from that wind still has us in its grip. But despite the dark that has happened, her memory should be bright," he said.