Marciano White, 37, was arrested near the scene of the shooting with a firearm, police spokesman Anthony Spicuzza said on Sunday evening. He has not been charged in connection with the shooting itself.
Chicago has struggled for years with violent crime, logging more murders annually than the combined figures from New York and Los Angeles, two much larger cities.
The victims ranged in age from 16 to 48, and 12 were in hospital on Sunday, hours after police responded at the scene at around 12:30 a.m. CT (0630 GMT), according to a police statement.
Four of the victims, including a 16-year-old male, were critically wounded after suffering gunshot wounds to the chest or lower back.
The other person in custody, a 25-year-old male, was also a victim in the shooting, police said.
“This party was given in the memorial of a subject that was slain in April,” Chicago Police Chief of Patrol Fred Waller said at an early morning news conference. “We’re still developing details as far as that goes.”