The parents and three young children were on a cycle touring holiday of the UK when their bike was taken from the marketplace in Beverley while they ate dinner in the town on August 17.
Despite the arrest, police have not recovered the bike and they believe it may now be in Driffield. The last sighting was of it being ridden towards the town.
The family have now returned to Belgium, as they were on the last leg of their trip and were camping near Beverley before cycling to Hull to catch a ferry to the Netherlands when the theft occurred.
Humberside Police said: "Following our previous appeal, a man has been arrested in connection with the incident and has been released as we continue our enquiries. We still need to locate the bike and reunite it with its owners.
The bike is an Urban Arrow white-framed cargo bike with a large hood and two baskets on the side, which contained two rucksacks and a toolbox.
"CCTV footage from Saturday Market showed the bike being ridden off in the direction of North Bar. The person in the footage was wearing a red baseball cap, black jacket, black shorts and carrying a white carrier bag.
"We now believe the bike may have been taken from Beverley to the Driffield area.
"As such, we are appealing for residents in the Beverley and Driffield areas to let us know if they have seen this distinctive bike. Shopkeepers in the towns are asked to check their CCTV, and motorists who were driving between Beverley and Driffield around the time are also asked to check their dashcam footage.
"If anyone has any information that may help in our enquiries, they are asked to contact us on our non-emergency number 101, quoting log 474 of 17 August."