The boyfriend of Miss Honduras' sister has confessed to killing the two women after their bodies were found buried along a remote river bank.
Beauty queen Maria Jose Alvarado, 19, and her sister Sofia, 23, went missing a week ago.
Police said Sofia's boyfriend, Plutarco Ruiz, became jealous when he saw her dancing with another man during his birthday party on 13 November.
National Police director General Ramon Sabillon said a heated argument broke out before Ruiz first shot Sofia and then Maria Jose as she tried to escape.
Their bodies were found buried beside a river in the mountainous region of Santa Barbara - just a few miles from the La Aguagua spa where they had been celebrating.
Miss Alvarado had been due to fly to London on Wednesday to take part in the Miss World pageant.
The sisters' mother, Teresa Munoz, told Televicentro that Ruiz called her the morning after her daughters disappeared, claiming the young women had left the party in a car with some other people.
A second man, Aris Maldonado, has also been arrested and police are searching for other suspects.
Honduras is statistically the most violent nation in the world.
A UN report released in April this year revealed the Central American nation, which has a population of eight million, has a murder rate of 90.4 people per 100,000.
Venezuela, which came second on the list, has a murder rate of 53.7 people per 100,000.