The 55-year-old victim was discovered by a passer-by in Pyothall Road in Broxburn, West Lothian, at around 4.45am yesterday.
Neighbours described seeing the man’s body lying across a pavement and grass verge beside a woodland area popular with dog walkers.
Residents said that officers who arrived on the scene led a man out of a house in Galloway Crescent and took him away in a police car.
The street was sealed off by officers while forensic specialists spent the day examining the scene, as well as the house and its garden.
Detectives also visited the Badger’s Brook pub in the town’s East Main Street yesterday afternoon and spoke to staff as part of the inquiry.
Police ordered council waste collectors not to empty any wheelie bins from streets in the vicinity as they scoured for evidence.
A neighbour, who asked not to be named, said: “I was woken by a police siren at about 4.50am. I looked out the window and I could see two police officers and another man standing over the body.
“It was a man wearing a white shirt and black trousers. He was lying half on the pavement and half on the grass.”
He said officers had gone to a house along the road and a man was led away from the property,
The forensic team placed a series of blue plastic covers on the pavement as the rain fell yesterday morning before replacing them with yellow markers used to denote points of interest to the investigation.
Another neighbour said: “I was woken up about 5.30am by the sound of someone moving a bin. I looked out the window and could see the man lying in the street with a blanket over the top of him. There was lots of police cars and vans.
“I had my window open when I was sleeping so I would have heard any shouting or arguing, but I didn’t hear anything. It’s a very, very quiet place round here. The houses were only built about 2005. I had a friend who actually moved away from here because she said it was too quiet.
“It’s all just trees and fields at the back of where he was found.”
A shopkeeper said it was her friend who had found the body. She said: “I’m not sure what he was doing out at that time but he was the one who discovered it as he was walking along and called the police. He said the police officer had been kneeling down over the body. He didn’t know who the man was.”
A tent was erected over the spot where the body was found to continue forensic work.
A team of officers arrived in police vans yesterday evening to carry out further door-to-door inquiries in the streets surrounding the crime scene.
A police spokesman said officers investigating the death of a 55-year-old man in Broxburn had arrested a 25-year-old man in connection with the incident.
It is expected the man will appear at Livingston Sheriff Court on Monday.
The police spokesman added: “Anyone who can assist detectives with their enquiries is asked to come forward immediately.”