The man was arrested at his home in eastern Kosovo close to where the 14 were shot dead in a field while bringing in the wheat harvest in July 1999, soon after the province came under United Nations and NATO control.
Police spokesman Veton Elshani said U.N. special police units arrested a suspect charged with committing war crimes, but gave no further details. He was identified by media as Mazllum Bytyqi.
A British patrol in 1999 found the victims of the massacre after hearing automatic weapon fire near the town of Gracko, 10 miles (16 kilometers) south of the capital, Pristina.
The attack was blamed on ethnic Albanian militants seeking revenge for years of persecution by Serb authorities and highlighted the animosity between the majority ethnic Albanians and minority Serbs that still persists.
Early hopes faded with the massacre that the peacekeeping mission would be able to impose ethnic tolerance in the strife-torn province.
Ethnic Albanians leaders and Serbia's officials are engaged in talks aimed at settling whether the province becomes independent - as the province's Albanians demand - or remains part of Serbia.
A previous attempt to find a solution to the problem collapsed earlier this year, when Serbia and Russia rejected a U.N. plan to grant Kosovo limited independence.
Although ethnically motivated crimes have subsided in recent years, tensions remain high between the two communities.
With no solution in sight, officials fear extremists on both sides might revert to violence. Outlawed paramilitaries from both sides have warned they are prepared to start fighting over the independence issue.
Kosovo is legally part of Serbia but came under U.N. and NATO control after the alliance bombed Serbian troops for 78 days in 1999 to end a crackdown on separatist Albanians.