The swoop came 24 hours after Walter Renwick denied chainsawing the 300-year-old landmark at Sycamore Gap along Hadrian’s Wall.
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Three police vans were in the driveway at Plankey Mill farm, eight miles from the scene in Northumberland, while at least seven officers conducted a search.
Mr Renwick, 68, has been ordered to quit the property where he ran a tourist campsite after losing a two-year legal battle.
During the case, he said: “I was born here. It is like a tree with roots.”
The 70ft tree — which featured in 1991 Kevin Costner movie Robin Hood: Prince of Thieves — was attacked in the dark between Wednesday and Thursday last week.
On Friday, Mr Renwick told The Sun: “I didn’t do it.”
But he conceded: “I am a former lumberjack and I have just been kicked off my property, so I can see why people have pointed the finger.”
On Friday night, Northumbria Police said they had arrested a man in his 60s and held him overnight.
And last night Mr Renwick’s family confirmed to The Sunday Times that he was in police custody.
Cops had previously arrested a 16-year-old boy on suspicion of causing criminal damage, then released him on bail pending further inquiries.
A local pub is offering a £1,500 bar tab to anyone who helps to solve the mystery.
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