The shooting is believed to have occurred at a Wildwood home, northwest of Melbourne, on Wednesday night, Victoria Police said.
Investigators believe the victim, a 56-year-old Meadow Heights man, attended the property about 7.20pm with two other men.
He spoke with two occupants of the property, including a Wildwood man, 55, and his female partner, before an argument is understood to have broken out.
The Wildwood man is accused of shooting the 56-year-old, before the victim's associates fled the scene and subsequently called triple zero.
The Wildwood man is believed to have then placed the victim in the back of his ute, a black Mitsubishi Triton, before driving off about 7.35pm.
Neither the victim or the alleged offender were at the property by the time local police arrived.
The ute, with registration ATS040, was captured on CCTV at a BP service station on the corner of Mickleham and Somerton Roads in Greenvale shortly before 1am.
The Wildwood man was then captured at 12.55am, about six minutes later, filling the ute at a Liberty service station on Mickleham Road in Greenvale.
The victim is not visible in the back of the ute in the footage and his whereabouts and condition remain unknown, police said.
However, his alleged shooter was taken into custody on Wildwood Road about 5.30am on Thursday and will be interviewed by detectives.
An urgent police search is underway for the victim, with air wing, dog squad and other local and specialist units called in.
Their efforts were focused on the Sunbury area as of Thursday morning.
Lines of inquiry include whether the victim may have escaped and is still in the area injured or on foot or if he may have been left somewhere.
Burnt clothes, believed to have belonged to the alleged shooter, were later found at the site of a suspicious fire on Lancefield Road, reported to emergency services about 4am.
The victim is described as being of Middle Eastern appearance and was last seen wearing dark clothes.
Detectives have appealed for anyone who may have seen an injured man in the Greenville, Sunbury, Bulla, Oaklands Junction or Wildwood areas since 8pm on Wednesday to contact triple-zero.
Anyone who was in those areas from 7.30pm with CCTV or dash cam footage is also urged to contact police.
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