Alejandro Zobaran Arriola and three other Eta suspects were seized by French police at a holiday cottage in a remote village near the Belgian border.
One of the other three detainees is also thought to be a senior militant.
Eta's campaign for independence for the Basque region has cost more than 800 lives since 1968 but it called a halt to armed attacks last year.
The four suspects were arrested at a cottage overlooking the tiny hamlet of Willencourt, population 140, south of the port of Dunkirk.
Police swooped on the house, local resident Mickael Catouillard told AFP news agency, adding that there had been a sudden swarm of cars and flashing lights.
Firearms and documents were seized inside the house, Spanish national radio said, citing counter-terrorism sources.
'Odd kind of tourists'
Local hunter Pierre Dufour told AFP that the suspects had moved into the cottage almost two weeks ago, saying they had come to tour the Belgian coast.
"They planned to stay three weeks and they paid for it all up front," he added.
According to the Spanish daily El Pais, the owner of the cottage tipped off police about the men when he found their identity documents suspicious. They had reportedly tried to pass themselves off as students.
"I too found it weird," Mr Dufour said.
"For tourists, they hardly ever went out. One day one of them, a young man, asked me the way to a baker's. He spoke with a strong foreign accent. He was very polite, very friendly."
Mr Arriola - known as Xarla - is believed to be the sixth Eta military chief to be detained since Francisco Javier Lopez Pena was arrested in May 2008.
Eta has been coming under increasing pressure to lay down its weapons and, in January this year, announced that it would cease "offensive armed actions".
But Prime Minister Jose Luis Rodriguez Zapatero rejected the declaration, saying he wanted the group to be completely disbanded.
Spanish authorities believe their campaign against Eta has crippled its operational capacity, with dozens of arrests - including a number of top leaders - made in collaboration with forces in other countries.
BBC News
