The former 'News of the World' crime editor was arrested yesterday on suspicion of paying police officers.
Lucy Panton, who is married to a Scotland Yard detective, is being questioned at a south London police station after officers swooped on her Surrey home at dawn.
The 37-year-old is the seventh suspect arrested under Operation Elveden, which runs alongside the Operation Weeting hacking inquiry.
Ms Panton, who has two young children, was promoted from crime correspondent to crime editor in October 2005.
She remained at the paper until it was shut down at the height of the hacking scandal in July.
Elveden was launched after officers were handed documents suggesting News International journalists made illegal payments to police officers.
A Metropolitan Police spokesman said a woman was arrested "on suspicion of committing offences involving making payments to police officers for information" at 6.15am.
He added: "She was arrested at a residential address in Surrey and has been taken to a south London police station where she remains in custody."
Ms Panton, who has also worked for 'The People', is the first Elveden arrest since 'Sun' district editor Jamie Pyatt (48), was held last month.
Others questioned as part of the inquiry include former News International chief executive Rebekah Brooks, ex-Downing Street communications chief Andy Coulson, former 'News of the World' managing editor Stuart Kuttner, the paper's former royal editor Clive Goodman and a 63-year-old man whose identity has not been disclosed.
Mrs Brooks and Mr Coulson are both former editors of the 'News of the World', which was closed in July at the height of the hacking scandal.
Elveden was launched in the summer after it emerged that News International handed documents to Metropolitan Police officers investigating phone hacking which indicated illegal payments to police.
Sir Paul Stephenson, the then Met commissioner, said in July that evidence from the publisher suggested a small number of officers were involved.
The phone hacking scandal led to the closure of the 'News of the World' after 168 years, prompted a major public inquiry, and forced the resignation of Metropolitan Police commissioner Sir Paul and assistant commissioner John Yates.
It also emerged yesterday that Piers Morgan will give evidence to the inquiry next week, a CNN spokeswoman confirmed.
The former 'News of the World' and 'Daily Mirror' editor has denied all suggestions that he was aware of phone hacking. Another former 'News of the World' editor yesterday said that he feared there were "bombs under the newsroom floor" in the form of illegal practices at the paper.
Colin Myler told the Leveson Inquiry he felt "discomfort" over the extent of phone hacking among the now-defunct Sunday tabloid's journalists.
He became 'News of the World' editor in January 2007 after Andy Coulson resigned following the jailing of the paper's royal editor Clive Goodman and private detective Glenn Mulcaire.