The arrest of 49-year-old Erin Patterson is the latest twist in a saga that has gripped the nation and thrust the spotlight on the small rural town of Leongatha, 110 kilometres (70 miles) southeast of Melbourne.
Police said they arrested Patterson in the morning and began a search of her home with the help of "technology detector dogs", which can sniff out electronic devices such as USB keys.
Homicide squad investigators will question her once the search of her home is complete, said Detective Inspector Dean Thomas of the Victoria police homicide squad.
"Today's arrest is just the next step in what has been a complex and thorough investigation by homicide squad detectives and one that is not yet over," Thomas told reporters, without taking questions.
The probe had been subject to "incredibly intense" media and public interest in Australia and internationally, he said.
"I think it is particularly important that we keep in mind that at the heart of this three people have lost their lives," Thomas said.
In smaller communities, "a tragedy such as this can reverberate for years to come", he added.
Patterson, who denies any wrongdoing, has not been charged.
She served the mushrooms as part of a beef Wellington dish on the afternoon of July 29 to her estranged parents-in-law Don and Gail Patterson, local Baptist pastor Ian Wilkinson and his wife Heather.
Later that night, the two couples were taken to hospital with food poisoning symptoms as their health rapidly deteriorated.
Within a week, three of them were dead.
Police believe their symptoms were consistent with those caused by eating highly toxic death cap mushrooms.
- 'Devastated' -
Of the four, only 69-year-old pastor Wilkinson survived after spending nearly two months gravely ill in hospital. He was released on September 23.
He appeared for the first time in public in early October at a memorial for his wife, with a local newspaper describing him as "frail-looking" and "using a walking frame".
Police had named community newsletter editor Patterson as a suspect soon after the fateful meal.
Patterson always insisted she was innocent, reportedly saying in August that she had unwittingly bought the mushrooms from an Asian grocery store and that the poisonings were accidental.
"I am now devastated to think that these mushrooms may have contributed to the illness suffered by my loved ones," she said in a statement provided to Australian media at the time.
"I really want to repeat that I had absolutely no reason to hurt these people whom I loved."
A memorial service for Don and Gail Patterson was held at the end of August. Reverend Fran Grimes told the congregation that the community was trying to "shield and protect the family from heartless speculation and gossip".
Death cap mushrooms sprout freely throughout wet, warm parts of Australia and are easily mistaken for edible varieties.
They reportedly taste sweeter than other types of mushrooms but possess potent toxins that slowly poison the liver and kidneys.
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