Metropolitan Police officers arrested the 46-year-old man in St Leonards-on-Sea, East Sussex.
The Met is the UK force responsible for investigating accusations of war crimes or human rights abuses.
The BBC said that the suspect is linked to the former government in Nepal and that police are acting on a complaint made in the UK.
In a brief statement, the Metropolitan Police said the man remained in custody in a police station in Sussex.
Officers are conducting searches at the residential address where the man was arrested early this morning.
Nepal's decade-long civil war, which ended in 2006, witnessed the deaths of almost 15,000 people while thousands more were tortured or injured.
Some 100,000 people were internally displaced and the fate of approximately 1,400 others remains unknown to this day. Both the army and Maoist rebels were accused of committing atrocities during the conflict.
The man is being held on suspicion of torture contrary to Section 134 of the Criminal Justice Act 1988.
The rarely-used 1988 war crimes law is known as a "universal jurisdiction" offence. It permits the UK to arrest and prosecute people accused of human rights abuses committed overseas, even if the crime is not connected to events in the UK.
The investigations rarely reach trial because of the difficulties detectives face in gathering sufficient evidence to put before a jury.
The last successful war crimes prosecution in the UK is thought to have been in 2005 when a former Afghan warlord, hiding in south London, was jailed for 20 years.
Faryadi Zardad, who was living in Streatham at the time of his arrest, was found guilty at the Old Bailey of torture and hostage-taking in his home country.
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