Moshe Harel was arrested along with several other people in connection with a parallel investigation in Israel, said the mission, known as EULEX.
Police in Kosovo accuse Israeli Harel of seeking out people in need of kidney transplants and luring donors to Kosovo from Turkey and the poorer countries of the former Soviet Union with the promise of 15,000 euros ($20,000) in payment. It is not known whether they received the money.
The organs were then sold on for between 80,000 and 100,000 euros ($100,000-$125,000).
The scandal came to light in 2008 when a Turkish man was stopped at Pristina airport, visibly in pain having had his kidney removed.
The trafficking ring acted out of the Medicus clinic on a residential road on the outskirts of Kosovo's capital Pristina. Clinic owner Lutfi Dervishi, his son and five others are standing trial in the city on charges of trafficking human organs.
An Interpol warrant has also been issued for a Turkish surgeon, Yusuf Ercin Sonmez.
"Harel is a key suspect in a separate, but parallel, investigation regarding the Medicus indictment, filed in June 2011, charging him with the criminal offenses of trafficking in persons and organized crime," TELEX said in a statement on Friday.
It did not give further details or specify when he was arrested.
Local media reports in Kosovo quoted EULEX prosecutor Jonathan Ratel as saying the mission would seek Harel's extradition.
Attention over the trafficking allegations has grown since Council of Europe envoy Dick Marty in 2010 accused Kosovo Albanian guerrilla fighters of harvesting organs from captives, mainly Serbs, during the 1998-99 Kosovo war.
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http://www.bbc.co.uk/news/world-europe-18203920
Interpol issued an alert for Moshe Harel