The arrest of a 62-year-old man in Leicester is the second arrest conducted by Operation Pallial.
The first took place on April 23 and the man from Ipswich, Suffolk - accused of "a number of serious sexual offences against a number of individuals" - was bailed until the end of July.
A report published in April, which outlined phase one of the inquiry, revealed that the alleged victims in the case were aged between seven and 19.
The report said a total of 84 people - 75 male and nine female - had been named by complainants.
Of these, 16 were named by more than one alleged victim and 10 may now be dead.
The large number of alleged victims and care homes, and the duration of the period involved, is much wider than previously thought.
Speaking on the day the first report was published, North Wales chief constable Mark Polin, who asked the National Crime Agency (NCA) to run Operation Pallial, warned offenders: "If you believe that the passage of time will reduce the resolve of Operation Pallial or any police force to identify people still alive who have caused harm to others and bring them to justice, you are sorely mistaken.
"People who commit serious and sexual offences should live with the knowledge that we will always examine new information and evidence and seek to bring them to justice for their crimes."
The NCA was selected at the request of North Wales Police to ensure the inquiry's independence.
It was set up to re-examine claims of sex crimes and look again at the original police investigations into abuse at care homes in North Wales.
The investigation is being carried out by 31 officers drawn from Soca, the Child Exploitation and Online Protection Centre (Ceop) and police forces from across England.
Detectives are hoping to develop forensic leads through scientific advancements which might not have been previously available.
In 2000 the Waterhouse Inquiry was established to study claims linked to homes in the former council areas of Gwynedd and Clwyd since 1974.
Following Waterhouse, eight people were prosecuted and seven were convicted.
Around 140 compensation claims were settled on behalf of the victims.
But victims have since said that the inquiry examined only a fraction of the abuse which took place.
High Court judge Mrs Justice Macur is leading a review, which will look at whether specific allegations were not investigated, and urged alleged victims and all other interested parties to give further evidence.
The initial Operation Pallial report found no evidence of police misconduct in connection with the earlier investigation.