The 39-year-old woman was arrested at 6.55am at her home on suspicion of conspiring to intercept communications contrary to section 1 of the Criminal Law Act 1977.
Scotland Yard, which has 45 officers investigating phone hacking as part of Operation Weeting, did not release details of the woman's identity. However, it is understood the woman arrested is not a journalist. She was taken to a police station in West Yorkshire for questioning this morning.
Metropolitan police commissioner Sir Paul Stephenson said on Wednesday the Operation Weeting team remained at 45 strong and was continuing its wide-ranging inquiry into phone hacking as well as providing information for the civil court claims.
A spokesman for Scotland Yard said: "The woman was arrested from a residential address in West Yorkshire.
"Operation Weeting is conducting a new investigation into phone hacking. It would be inappropriate to discuss any further details regarding this case at this time."
A spokeswoman for News of the World owner News International said: "This morning's events did not relate to a current employee or a former full-time member of staff of the News of the World.
"We have been co-operating fully with the police inquiry since our voluntary disclosure of evidence reopened the police investigation.
"Since then we have been determined to deal with these issues both on the criminal and civil side. In April we admitted liability in several civil cases and we are attempting to bring these to a fair resolution."
The woman is the fourth person arrested by officers on the inquiry. In April a senior reporter at the News of the World, James Weatherup, was arrested and questioned. Weatherup, who has also worked as a news editor with the Sunday tabloid, was released after questioning.
The paper's chief reporter Neville Thurlbeck, and assistant editor (news) Ian Edmondson, were also held in April and released on police bail to return in September.
Scotland Yard was heavily criticised over its handling of the original phone-hacking inquiry, which led to the conviction of News of the World royal editor Clive Goodman and private investigator Glenn Mulcaire in January 2007. The then News of the World editor, Andy Coulson, resigned following Goodman and Mulcaire's convictions.
Coulson resigned again as prime minister David Cameron's director of communications in January this year, admitting that the ongoing row about the affair was making his job impossible. He had resigned as News of the World editor following the conviction of Goodman and Mulcaire in January 2007.
Days later the Met launched Operation Weeting, after receiving "significant new information" from News International.