Police were called to Mayfield Grove in the town just after 10pm on March 5, where they found the suspect in the street.
A 48-year-old man was found with serious injuries in a nearby flat but was pronounced dead at the scene by ambulance staff.
The 23-year-old man remains in custody for questions.
North Yorkshire Police asked anyone who was in the Mayfield Grove area of the town on the evening of March 5 and saw anything suspicious to contact them on 101 and quote incIdent number 12210072144. Alternatively, contact Crimestoppers anonymously on 0800 555 111.