Stephany Flores, 21, was killed in a Lima hotel Sunday, five years to the day after Holloway disappeared.
The suspect, Joran van der Sloot, was escorted by three police officers as he was taken from a dark vehicle into a police office in downtown Santiago, Chile. He made no comment as he entered, walking calmly and without handcuffs as journalists shouted his name.
Van der Sloot was detained while traveling in a taxi, about halfway to the coast on Route 68, said Prefect Alfredo Espinosa, chief national spokesman for Chile's investigative police. The suspect did not resist and has been calm in detention, Espinosa said.
Chilean police are awaiting instructions from their counterparts in Peru, Espinosa added.
In Lima, police Gen. Cesar Guardia said Flores, who had been seen with the suspect early Sunday, was found Wednesday lying face down on the floor of van der Sloot's hotel room. Her neck was broken, and she was fully clothed, with no signs of having been sexually abused, Guardia told The Associated Press.
Authorities found no potential murder weapons in the room, Garcia said.
Flores was killed exactly five years after the May 30, 2005, disappearance of Holloway during a high school trip in Aruba, a Dutch Caribbean island where van der Sloot's late father was a prominent judge
Prosecutors said van der Sloot is still their main suspect in the case even though he was never charged.
Guardia said the 22-year-old Dutchman was in Peru for a poker tournament and appears with the dead woman in a video taken at a Lima casino early Sunday. The two were later seen entering the hotel by one of its employees about 5 a.m. and the Dutchman departed alone about four hours later, he said.
"We have an interview with a worker at the hotel who says she saw this foreigner with the victim enter his room," Guardia said.
The victim's father, Ricardo Flores, 48, is a former president of the Peruvian Automobile Club who won the "Caminos del Inca" rally in 1991 and brings circuses and foreign entertainers to Peru. He ran for vice president in 2001 and for president five years later on fringe tickets.
A lawyer for van der Sloot in New York, Joe Tacopina, cautioned against a rush to judgment.
"Joran van der Sloot has been falsely accused of murder once before. The fact is he wears a bull's-eye on his back now and he is a quote-unquote usual suspect when it comes to allegations of foul play," Tacopina said.
Van der Sloot was twice arrested but later released for lack of evidence in the 2005 disappearance of Holloway in Aruba.
No trace of her has been found and van der Sloot remains the main suspect in the case, Ann Angela, spokeswoman for the Aruba prosecutor's office, said Wednesday.
"What's happening now is incredible," she said. "At this moment we don't have anything to do with it, but we are following the case with great interest and if Peruvian authorities would need us, we are here."
The mystery of Holloway's disappearance garnered wide attention on television and in newspapers in Europe and the United States.
Two years ago, a Dutch television crime reporter captured hidden-camera footage of van der Sloot saying he was with Holloway when she collapsed on a beach from being drunk. He said he believed she was dead and asked a friend to dump her body in the sea.
Judges subsequently refused to arrest van der Sloot on the basis of the tape.
A spokeswoman for Holloway's mother, Beth Twitty of Mountain Brook, Alabama, told the AP the family was aware of the development in Peru but would have no comment.