A spokesman for the Indonesian police said that Muchdi Purwoprandjono, a deputy head of the State Intelligence Agency, was arrested late on Thursday after voluntarily turning up for questioning.
His detention is the first formal acknowledgment by authorities that the powerful agency may have been involved in Thalib's death.
The police spokesman said Purwoprandjono had been declared a suspect in the murder, a formal step in criminal investigations here, meaning police believe they have enough evidence to bring the case to trial.
Human rights activists say the investigation into Munir's killing is a test of how much Indonesia has changed since the days of former president Suharto, who resigned amid widespread protests in 1998.
State-sponsored killings were common during Suharto's regime, while military and police officers were able to act above the law.
Earlier this year, Indonesia's supreme court sentenced Pollycarpus Budihari Priyanto, a 46-year-old pilot for national airline Garuda, to 20 years in jail for his part in Thalib's murder.
An independent fact-finding team established by Indonesia's president revealed phone records showing calls between Priyanto and a phone registered to Purwoprandjono before the murder.
Purwoprandjono testified at Priyanto's trial that someone borrowed his phone to make the calls.
Munir, who was 38 at the time of his murder, rose to prominence toward the end of the Suharto presidency.
He went on to probe killings by Indonesian troops during East Timor's bloody struggle for independence as well as cases of military-led violence in the provinces of Papua and Aceh.