The man, who was in his 60s, died at Silverthorn Avenue in the town and police were informed of his death just after 12:00 GMT on Tuesday.
Officers investigating the circumstances of his death arrested a 25-year-old man in Coleraine just after 17:30 GMT.
There are no further details at present.
Police are treating the death of a man in Coleraine, County Londonderry, as suspicious and have made an arrest.