Officers confirmed James Alex Fields Jr, 20, from Ohio, had been arrested in connection with the horror crash.
Local media reported that a 32-year-old woman was killed and 19 others were injured when the car smashed into the back of another vehicle, which then ploughed into the crowd of counter-protesters.
The incident came on the second day of protests as white supremacists clashed with anti-Nazi groups.
Dramatic footage surfaced online appearing to show a vehicle intentionally driving towards crowds of people.
A damaged light-colored Toyota vehicle appears to have reversed away from the scene after driving into crowds.
PAARRESTED: James Alex Fields Jr is held on suspicion of second-degree murder
The far-right group took to the streets in the Virginian city to complain that white history was being erased from America’s identity.
Men dressed in military-style uniforms were seen carrying rifles and shields in the area.
Other video showed chemical sprays and smoke bombs being used.
The car was filmed ploughing into protesters and leaving blood splattered across the ground a few hours later.
SGCRASH: The car appeared to reverse away from crowds after the incident
SGRUSH: Local media reported there were 'extremely heavy injuries'
President Trump and First Lady Melania Trump have called for peace.
Trump said on Twitter: "Our country encourages freedom of speech, but let's communicate w/o hate in our hearts. No good comes from violence."
And he later condemned "the display of violence and bigotry in the strongest possible terms".
He added that "no citizen should ever fear for their safety – the hate and division must stop now".