The body of 53-year-old Martin Hamilton, nicknamed the Blackhill Butcher, was found by a dog walker in woodland in West Calder, West Lothian, in December.
He had been released from prison a year previously but was being sought by police for breaching the terms of his licence.
James Farrelly, 52, has been charged with his murder at Livingston Sheriff Court.
Farrelly, from Blackburn, West Lothian, made no plea or declaration and was remanded in custody.
Following his arrest on Friday, police said they planned to revisit a number of people they have spoken to in connection with the investigation.
Hamilton had been convicted of a number of crimes including drug-dealing and torture. His nickname came from the Glasgow housing estate where he operated from.