French police say the suspect is a former municipal police officer and father of three children, who is believed to have been dismissed from the police in June last year, apparently for using a petrol payment card for personal journeys.
On losing his job he lost the home that went with it and moved to another village, finding work in security over the Swiss border in Geneva.
Neighbours describe him as boorish and solitary and say his hobbies included collecting firearms and hunting.
Checks on his mobile phone show he was in the zone at the time of the murders and a search of his home revealed his passion for guns.
Ballistic tests are underway to find out whether the murder weapon was among them.
But police say they know of no connection between the arrested man and the victims and have no decisive evidence that he is the murderer.
Another raid is reported to have been carried out on another house in the hamlet of Taillores.
Police were spotted digging up part of the garden and there is speculation that there may be a connection to another unsolved murder that took place in Lathuile in November last year.
This is the first time anyone has been arrested in France in connection with the murder of Saad al-Hilli, a 50-year-old Iraqi-born British tourist along with his 47-year-old wife Iqbal and her 74-year-old mother in a woodland car park close to the village of Chevaline in the hills above Lake Annecy.
Each was shot multiple times in their British-registered BMW estate car and more than two dozen spent bullet casings were found near the vehicle.
A French cyclist was also shot dead.
The case has stumped investigators despite major efforts on both sides of the English Channel.
Investigators had been looking at an inheritance dispute with his brother Zaid but Tuesday's arrest focused attention on the possibility of a local killer.