Ms James, a popular community support officer, was found dead in Akholt Wood near her home in Snowdown, Kent, on April 27.
A post-mortem examination revealed the 53-year-old died from significant head injuries.
Kent Police have said a man in his 20s from the Canterbury area was arrested at 9.30pm on Friday.
The force confirmed the man is a British national.
Assistant Chief Constable Tom Richards, from Kent Police, said: “We continue to urge anyone with information, no matter how small or insignificant it may seem, to contact us.
“If you were in the Snowdown area between 1pm and 4.30pm on Tuesday 27 April, please contact us.
“This includes anyone local who may have seen something out of place at the time, or who came across someone who made them feel uneasy – such as feeling compelled to cross the road or change the route they were walking.”
Kent Police had released a photo on Friday of a man they said could be of “crucial importance” to the investigation.
But the force said the man had been identified and that they were no longer appealing for information about him.
Kent Police said on Thursday that the search area was being broadened to include “a number of other locations” in addition to the woodland where she was found.
Ms James, described as “fiercely loyal” by her family, died from serious head injuries while out walking her dog.