A 30-year-old man from Manchester was being held on suspicion of the murder of Aya Hachem after a European Arrest Warrant was executed in Fuengirola on the Costa del Sol on Saturday, Lancashire Police said.
Miss Hachem, 19, was gunned down on a shopping trip near her home in Blackburn on the afternoon of May 17.
The first of two shots fired from a passing vehicle hit a building.
However, the second struck the teenager in the chest.
Police said the man, who is now subject to the extradition process, was also held on suspicion of the attempted murder of a man officers believe was the target of the shooting.
A 33-year-old man from Manchester was also arrested on Tuesday on suspicion of assisting an offender.
Warrants were executed at addresses in Grassmere Road and Moss Lane in Partington, Manchester, the force spokesman said.
Six men and one woman have already been charged with murder, alleged to have arisen out of a dispute between two rival tyre firms, RI Tyres and Quick Shine.
The defendants are also accused of the attempted murder of the alleged intended target, the owner and manager of Quick Shine.
Anybody with information can contact the force on 101, quoting log number 0412 of May 18, or anonymously through independent charity Crimestoppers on 0800 555111 or online at crimestoppers-uk.org.