Bhima Huija was involved in road blockades in Narayanpatna and Bandhugaon blocks when the tribal MLA from Laxmipur was abducted, they said.
Huija, who also led the extremists in Maudivalsa panchayat, was in the wanted list of police for a long time, Koraput SP Awinash Kumar said.
The wanted rebel was nabbed during a combing operation launched by the district voluntary force and COBRA following a tip-off on Sunday night, he said, adding that no weapon was recovered from the ultra.
During interrogation, the Naxal has confessed to his involvement in the murder of two persons at Changudibalsa village in Bandhugaon area, police said.