The man was arrested earlier yesterday and was being held at Chatham police station in Kent.
A police spokeswoman said: "Police have arrested a local man in his thirties in connection with the murders of Lin and Megan Russell.
"We have been granted an extension to continue questioning him, although we are not giving details of the time scale."
Lin and Megan were killed as they walked along an isolated footpath to their home in Chillenden, near Canterbury, Kent on 9 July. Mrs Russell had picked up Megan and her elder daughter, Josie, 9, from school. Their dog was also beaten to death in the attack.
Josie was attacked but survived with severe head injuries. She received a bravery award from the Duchess of Kent on Wednesday after recovering from her injuries enough to give police valuable information about the attack.
Although she still cannot speak more than a few words, Josie has explained to police, using models, how the killer stopped his car in the narrow country lane and beat the family with a hammer, leaving her for dead.
Josie and her father, Dr Shaun Russell, are planning to return to their native north Wales in the next few weeks.Reuse content