Jon Venables, who murdered toddler James Bulger when he was 10 years old, is believed to have been returned to prison for possessing indecent images of children.
Now 35, Venables is thought to have been locked up after officials found the images during a routine visit to his home last week, the Mirror reports.
He is understood to have been taken to a maximum security prison over the alleged breach to the terms of his licence.
Venables abducted, tortured and murdered James, two, with classmate Robert Thompson on Merseyside in 1993.
They were released in 2001 on life licence with new identities after serving eight years.
The reported arrest follows an incident in 2010 when Venables was sent back to prison for downloading and distributing child pornography.
He is subject to life-long licence conditions for his role in the murder of two-year-old James.
A source close to the investigation told a national newspaper: "It's all about protecting the public.
"We have these systems so those who could be a risk to the public are picked up.
"That's what happened here."
As reports emerged on Wednesday night, James's mother Denise Fergus tweeted: "Here we go again."
After serving eight-year sentences for James's murder, Venables and Thompson were granted life-long anonymity that saw them released under new identities in 2001.
Venables went on to offend again, including arrests for affray and possession of cocaine in 2008.
In 2010, he was jailed for two years after pleading guilty to downloading images of child abuse.
Venables, who was reportedly given a second new identity after his first alias was revealed, was granted parole in 2013.
In response to his latest reported offending, a Ministry of Justice spokeswoman said: "We do not comment on individuals."