The man arrested after missing four-year-old Cleo Smith was found alive in a locked house was "known to police", according to reports.
The 36-year-old has no connection to the Smith family, but is from their hometown of Carnarvon in Western Australia.
Detective Superintendent Rod Wilde, in charge of investigation, said: "He is known but I have to be very careful around that."
Neighbours were shocked to find Cleo, who has become the subject of international news, living on their street.
The 36-year-old man was found near to the home where she was discovered.
Pictures of Cleo looking happy and healthy have since been released.
The startled residents described the man arrested as a man who 'kept to himself'.
"He is a very quiet guy, bit of an oddball… definitely wouldn't have picked him, it has completely derailed me," local Rennee Turner said.
"I'd heard whispers. I kind of figured the police might have had an idea of what was going on, because I have never seen such a massive amount of cops here for so long."
Another neighbour said: "Not last night, the night before it, I heard a little girl crying but I wouldn't expect it to be Cleo."
While one added: "He's been acting a bit strange lately." And Henry Dodd told Nine News. "He will get in his car, drive that fast.
"He doesn't have his dogs at the front [normally], he has his dogs out the back, but through this week he had his dogs out the front and he has been acting weird."
9News reported that the man in custody 'sustained head injuries' while in his holding cell and has been taken to hospital by police.
DS Rod Wilde confirmed that police do not believe anyone else to be connected to Cleo's disappearance.
Cleo's disappearance
Cleo went missing on 16 October and the disappearance quickly became a huge story. She was taken as her family slept in a tent on a campsite. When they woke up, they noticed her and her sleeping bag missing.
A million dollar reward was issued for information in connection with her going missing.
Western Australia Police Force (WAPA) said: "It's my privilege to announce that in the early hours of this morning, the WAPA rescued Cleo Smith.
"Cleo is alive and well. A police team broke their way into a locked house in Carnarvon about 1am. They found Cleo in one of the rooms. I can confirm we have a man from Carnarvon in custody who is currently being questioned by detectives."
Cleo's mum Ellie said in a statement: "Our family is whole again."
