Stuart Hazell, who himself had gone missing around the time the grim discovery was made, was detained by officers after he was spotted by a member of the public in the South London Borough of Merton.
Just hours earlier, a manhunt seeking the 47-year-old had been launched and the public had been warned not to approach him.
The body was found at the home Hazell shared with Tia's grandmother Christine Sharp on the New Addington estate near Croydon, south London.
A forensic search of the terraced house continued last night. Earlier, a police spokesman said: "The family of Tia Sharp has been informed of the discovery."
Hazell gave a TV interview at the house just two days ago in which he denied harming Tia and appealed for her to come home.
He was interviewed by police as a witness on Wednesday but then released, and had claimed Tia set off for the Whitgift Centre in Croydon last Friday to buy flip-flops, having spent Thursday night alone with him while her grandmother was at work.
He later said another witness saw Tia leaving the house shortly after midday although police said that sighting had not been confirmed.
In a television interview on Thursday, Hazell issued a plea to Tia to come home.
Referring to the finger being pointed at him, he said: "Well, if they believe what they read in the papers, they can believe whatever they like because I know deep down in my heart that Tia walked out of my house, she walked out of there."
He also dismissed claims that his father contradicted his version of events. His father Keith claimed earlier that his son had walked her to the tram stop.
Hazell said: "My dad likes a drink, he's got good intentions but he said everything back to front.
"If I'd have walked her to the tram stop, I would have come with her to Croydon, then none of this would have happened."
Mrs Sharp, who left her home with police shortly before today's search began, told reporters this morning that her boyfriend was out helping in the hunt for Tia.
She said that Tia's mother Natalie was "in bits" and she did not know where she was as "she needed to get away".
She said: "We've all done our own little separate bit and Stuart's out doing that now."
Asked what he was doing, she said: "I don't know, I don't know where he is. Whatever way he is, he has had it hard.
"He knows the finger has been pointed at him. He knows this and it's been really hard for him."
After she left, a cordon was put around the house on The Lindens and white-suited forensics officers were seen going inside.
Until then, journalists had been able to approach the house, where Mrs Sharp, 46, lives with Hazell, 47, although reporters were met with hostility from family members.Police did not reveal where the body was discovered.
Officers were seen taking a ladder into the property this afternoon, sparking rumours that it may have been found in the loft. A dark holdall was later seen being removed from the house.
Between 80 and 100 officers had been involved in searches for Tia, including in woodland near the house but the house was not fully searched until today.
Scotland Yard had also been trawling through hundreds of hours of CCTV footage but found no images of her after she was reported missing.
Neighbour Chloe Hickie, 20, said: "I feel sick, I have just been told. I didn't want to say it but I had a gut feeling because she hadn't been seen for a week."
Contextual targeting label: