John Bennell, 27, from Hyde, Greater Manchester, died from a stab wound to the chest after four masked men tried to break into the back door of the terraced house in Salford at midnight on Wednesday.
Householder Peter Flanagan, 59, is still under arrest on suspicion of murder, but his son, Neil, 27, and a woman, 21, have since been released by police.
Yesterday police sources confirmed Mr Bennell was arrested in Tamworth, Staffordshire, earlier this month on suspicion of burglary.
He was held in custody overnight then released by Staffordshire Police pending further inquiries.
It is believed Mr Bennell was carried from the house on Ethel Avenue, to a nearby street after being stabbed in the break-in.
Police were first called by a frantic 999 call from a woman to reports of a burglary at the house, then a second call to reports of an injured man being carried along the street nearby.
Mr Bennell was taken to hospital where he was pronounced dead. A post mortem confirmed he died as a result of a knife wound to the chest. Police have made a public appeal to try to trace his three accomplices.
The incident came after Prime Minister David Cameron vowed to bring in stronger measures to protect homeowners defending their property.
“We will put beyond doubt that homeowners and small shopkeepers who use reasonable force to defend themselves or their properties will not be prosecuted,” the Prime Minister said.
Mr Flanagan, an engineer by trade, has been described as a hard-working man by locals.
Neighbour Sylvia Sharp-Cadigan, 67, said: “We are all upset because it is a quiet little street, we never have any bother. You don’t like it on your own doorstep.”
The house, part of a cul-de-sac, is next to an open area of scrubland close to a council recycling centre in the Pendlebury area of Salford.
Yesterday the house was still being treated as a crime scene, cordoned off by police tape while forensic officers in white boiler suits continued investigations.