Officers took Daniel Onesto into custody at about 7 p.m. Monday after pulling over his car on River Street near Cottonwood Street.
Onesto's arrest came after gang unit investigators identified him as one of three suspects in the murder of 16-year-old Tyler Tenorio.
Tenorio was stabbed shortly before 10 p.m. Friday near the corner of Chestnut and Laurel streets.
Police are seeking two other suspects in the stabbing. Two search warrants were executed this morning but the suspects remain at large.
Witnesses told police that Tenorio was engaged in a verbal altercation with a group of males and that one of them stabbed him multiple times in the upper torso. Tenorio died at the scene.
Santa Cruz High School officials will hold a community meeting Wednesday to give community members an update on the stabbing and provide information about gangs in the area.
The meeting will be held at 6:30 p.m. in the auditorium of the school, located at 415 Walnut Ave.
Extra counselors were on hand at the school this week to help students and staff deal with the loss.
Investigators are trying to determine the motive for the attack.
Anyone with information about the stabbing is urged to contact the Santa Cruz Police Department's investigations section at (831) 420-5820 or the anonymous tip line at (831) 420-5995.