Police said Jaya Singh, who is the father-in-law of the space agency's contract employee Krishnakumar, had entered the area using a fake ID card given by him and an ISRO contractor Diraviyam before he was picked up on suspicion by the Central Industrial and Security Force manning the Centre.
Singh gave contradictory replies when questioned by the CISF who later handed him over to police.
Singh, an employee of the Oman Government Transport Corporation, claimed that he had come only to have a look at the centre where the cryogenic engine was tested but he also entered the liquid propulsion testing area, both out of bounds for outsiders.
Krishnakumar and Diraviyam were arrested for giving him the fake ID card to gain entry into the centre, police said.
All the three have been booked on charges including trespass, forgery and violation of the Official Secrets Act.
The incident comes nearly four months after a 41-year-old woman created a scare when she breached layers of security to gain entry into the headquarters of Indian Space Research Organisation at Bangalore using a fake identity before being arrested.