Eric Lecuyer, 42, 17L Gamache Road, was arrested at his residence on a warrant for theft, police Capt. Vern Thomas said Wednesday.
Police recovered the box at his residence on Dec. 9, Thomas said.
Pinkerton Academy JROTC students installed the box on Nov. 22 in a collaborative effort with the Derry Veterans of Foreign Wars. After a certain amount of time, VFW members would come to collect the flags and properly dispose of them.
The box was stolen from the transfer station on Nov. 29 and police later began an investigation.
"We conduct thorough, well documented investigations before making an arrest," Thomas said. "We did so in this case."
He said no further information on the arrest was being shared.
The box is about 4 feet tall and weighs 150 to 200 pounds, according to officials.
Public Works Director Mike Fowler said the town first checked to make sure town employees, or someone from the school or local Veterans of Foreign Wars chapter, hadn't inadvertently removed the box.
Fowler said he then viewed video surveillance of the incident with a transfer station employee. It was apparent someone removed the box from the transfer station during the day when the facility was still open, he said.
Lt. Col. Howie Steadman, JROTC adviser, said last month that he was glad to hear the box had been recovered.
After the police investigation concluded, plans called for the box to be returned to the transfer station, Steadman said. The group is considering putting some security measures in place when it's returned.