A 93-year-old alleged former guard at the Auschwitz extermination camp was arrested Monday in southern Germany, the BBC reported.
Hans Lipschis was taken into custody in Aalen after prosecutors concluded there was "compelling evidence" that he had been complicit in murder, the report said.
Lipschis acknowledges he served with the Waffen SS at the camp in occupied Poland, but claims he was only a cook.
Last month, the Simon Wiesenthal Center named him as number four on its list of most-wanted Nazis.
The organization accused him of participating in the mass murder and persecution of innocent civilians, primarily Jews, at Auschwitz between October 1941 and 1945.
"This is a very positive step, we welcome the arrest, I hope this will only be the first of many arrests, trials and convictions of death camp guards," the Simon Wiesenthal Center's Efraim Zuroff told AFP following Monday's arrest.
Lipschis is the first person arrested as a result of a series of new investigations launched by the German authorities into some 50 former Auschwitz guards who are still alive.
His house was searched by police and he was then brought before a judge and remanded in custody, reported the BBC.
An indictment against him is currently being prepared, according to the Stuttgart prosecutor's office.
Auschwitz was the biggest Nazi extermination camp, where more than 1.1 million people, most of them Jews, were murdered.
Prosecutors have pointed to a re-interpretation of criminal law after the conviction of John Demjanjuk in May 2011.
Demjanjuk was found guilty of being an accessory to the murder of 28,060 Jews while he was a guard at the Sobibor death camp in occupied Poland.
His case means that potential defendants might no longer be able to hide behind the argument, in court, that they were simply following orders.
Lipschis' wartime identification papers prove he belonged to an SS company deployed as guards in Auschwitz. He was reportedly granted "ethnic German" status by the Nazis, according to the BBC.
He has told neighbors and reporters he worked only as a cook and saw nothing of the gas chambers and crematoria.
One German newspaper has previously reported that Lipschis, who was born in what is now Lithuania in 1919, finished World War II fighting for Germany on the eastern front.
He moved to Chicago in the U.S. in 1956, where he lived until 1983, when he was expelled for having concealed his Nazi past.
He returned to Germany and his whereabouts, in Aalen, have apparently always been known to the authorities.