In the culmination of a lengthy probe, authorities have found the man they believe used the pseudonym "NSU 2.0" to send hate mail to public figures, including several lawmakers.
Police in Berlin arrested the alleged author of more than 100 far-right threats during a raid on his apartment on Monday.
Public prosecutors in Frankfurt said the suspect had a series of prior convictions for extremist activities.
The arrest came after an extensive joint probe between prosecutors and investigators in the western state of Hesse.
The suspect's hard drives have been seized by police and are currently being evaluated.
Authorities say they have reason to believe the 53-year-old German citizen had been sending a series of letters with "race-baiting, insulting and threatening" content since August 2018.
The targets of the threats included national and regional lawmakers, a Frankfurt attorney, artists and human rights activists.
The letters were signed by the "NSU 2.0," a neo-Nazi moniker.
Peter Beuth, the state interior minister of Hesse, reported in mid-March that there had been 115 threatening letters attributed to the "NSU 2.0" signature. They had been addressed to 32 people and 60 institutions in nine German states, with the letters also sent to neighboring Austria.
The letters were typically sent by email, but were also delivered by fax and text message.
The NSU (National Socialist Underground) was a far-right terrorist group in Germany. It was uncovered in 2011 and was responsible for a number of murders and terrorist actions against immigrants and prominent left-wing figures.
The NSU is often associated with three figures hailing from the eastern German city of Jena: Uwe Mundlos, Uwe Böhnhardt and Beate Zschäpe. Mundlos and Böhnhardt killed themselves while on the run from German police in 2011.
The trio had an estimated to 100 to 150 accomplices who assisted them in their criminal activities.
In 2018, Zschäpe was convicted of murder on ten counts and sentenced to life in prison.