The remains, believed to be those of a 71-year-old woman, were found in Fenny Bridges, Honiton at about 16:00 GMT on Wednesday, police said.
A 66-year-old man is being held in custody and questioned at Heavitree Road police station.
The woman has yet to be formally identified but a post-mortem will be carried out later, police said.
Devon and Cornwall Police said it was not looking for anyone else in connection with the incident.
A man has been arrested on suspicion of murder after a woman's body was found in a van in Devon.