A man, 53, was held hostage in Dural for more than 48 hours before his rescue by tactical police during a raid in northern Sydney on Thursday.
The man had been standing outside a Mount Pritchard tobacconist about sunrise on Tuesday when he was punched and abducted by four balaclava-clad strangers.
He was driven to a property 25 kilometres away in Dural, which police raided about 10.30am on Thursday.
The hostage was taken to hospital and is in a stable condition, police said late on Thursday.
Officers arrested a 16-year-old boy at the scene.
He has been charged with ransom, firearm and criminal group offences and is due to face a children's court on Friday.
Police continue to hunt other males allegedly involved in the kidnapping.
News of the arrest comes after the remains of 85-year-old grandfather Chris Baghsarian were found in bushland in Sydney's northwest fringe.
Investigators believe Mr Baghsarian was killed at a makeshift stronghold in Dural, on Sydney's bushy northern outskirts, before his body was dumped on the night of February 14 a half-hour drive away in Pitt Town.
Two men - Gerard Anthony Andrews, 29, and Daniel Stevens, 24, - appeared via video link in a Sydney court on Thursday charged with his kidnapping and murder.
Police are still chasing a third alleged offender and others involved in the botched mistaken identity capture that has gripped the city.
Authorities believe the intended target for the abduction was a relative of underworld-linked Sydney businessman Dimitri Stepanyan, who lived on the same street as Mr Baghsarian.
Mr Baghsarian's family described the harrowing ordeal of the kidnapping of the beloved grandfather who "would never hurt fly" as a "nightmare."
