The single vehicle crash happened on the Newry Road in Crossmaglen, Co Armagh, shortly before 3.30 am.
The 25-year-old was arrested under the Road Traffic (NI) Order on suspicion of a number of motoring offences including causing death by careless driving.
He is being questioned by police at Ardmore PSNI station.
Police have appealed for anyone who was travelling on the Newry Road and who witnessed the collision to contact them in Newry.
The Newry Road remains closed at this time and diversions are in place.