Eight other men are in custody in connection with Monday's blast, with police and security agencies working to prevent further attacks. Britain's security level has been upgraded to "critical" meaning officials believe another attack may be imminent.
Authorities are chasing possible links between the bomber, Salman Abedi, and militants in Manchester, elsewhere in Europe, and in North Africa and the Middle East, AP reported.
Abedi, a college dropout who had grown up in the Manchester area, was known to security services because of his radical views. He was the son of Libyan parents who migrated to Britain in the early 1990s.
He reportedly was in contact with family members just before the attack.
The name of the man arrested in the early hours Friday and those of the eight others in custody were not released. No one has yet been charged in the bombing.
British police working on the case have resumed intelligence-sharing with US counterparts after a brief halt because of anger over leaks to US media thought by Britain to be coming from US officials.
British officials say that have receive assurances from US authorities that confidential material will be protected.
Campaigning in Britain's general election, set for June 8, is resuming after being suspended because of the bombing late Monday following an Ariana Grande concert.
Labor leader Jeremy Corbyn plans to use a speech Friday to link Britain's actions overseas to the increased extremist threat at home.