The man was found in the Lake Mangamahoe area between New Plymouth and Inglewood this morning, Radio New Zealand reported.
A knife had been taken from him and police were still hunting a third man. An abandoned car was found in the area.
Armed police were stopping and checking all vehicles heading along State Highway 3 into New Plymouth.
Police said earlier that Mikhail Rafael Pandey-Johnson and Karl Te Angiotu Nuku were being sought after the as-yet-unexplained killing of an Auckland man, Dean Stuart Browne, 38, whose body was found in a double garage behind a city dwelling on Friday night.
Another man was picked up last night and charged with illegal possession of a firearm
The armed offender squad (AOS) initially searched for the other two men within city limits but shifted their attention last night to Lake Mangamahoe.
Mr Browne's body was found in the garage in Drake St by one of the house occupants on Friday night.
Police believe that Mr Browne may have been killed elsewhere and his body dumped in the garage up to 24 hours earlier.
A post mortem examination has been done but police have not revealed the cause of death.
Mr Browne's movements in the months before his death were "sketchy", Detective Senior Sergeant Grant Coward said today.
"Part of our investigation is trying to ascertain what the victim has been up to for the last four months."
He would have left the Auckland area some time in October, Mr Coward told Radio New Zealand.
Takapuna police were at that time seeking Mr Browne after two warrants for his arrest were issued, one for serious assault and the other for breaching a protection order, the New Zealand Herald reported.
He was said to be aware police were seeking him and would have been in hiding, although it is unknown whether police had contacted him before his death.
He had contacts in Orewa, Whangaparoa and the North Shore.
Mr Coward said that the two men being sought were not New Plymouth locals and their connection to Mr Browne was unknown, Mr Coward said.
It was not known if the two were armed but Mr Coward warned they were dangerous and should not be approached.
Police have ruled out a gang connection, although it was unclear if drugs were involved.
Mr Coward said a photo of the pair would be released later today.
The police hunt began yesterday afternoon, when officers working at the Drake St address where the body was found spotted the men in a car and chased them on foot.
A third man, an associate of the two fugitives, was arrested in New Plymouth and had been been charged with unlawful possession of a firearm.
"Further inquiries are continuing in relation to him to ascertain whether he was involved with the homicide,"
Mr Coward said.
He said police had recovered a white 1993 four-door Toyota Corolla hatchback and were seeking reports of any sightings of ghe vehicle since Friday.
The grisly discovery of Mr Browne's body has left residents of the quiet Drake Street stunned and bewildered, The Taranaki Daily News reported.
They said their thoughts were with the family who found Mr Browne's body, a single mother with young children who moved in only 18 months before.
Police have said Mr Browne was not known to the family.
"It is a bizarre set of circumstances, but there is no connection between the occupants of the house and the deceased."
Joy Siebert, who lives directly next door to the house, said no-one in the street knew the young family very well, but she had seen the children playing in the yard quite often. "We don't think they'll want to come back," she said. "Can you imagine finding that?"
The family had been renting the home, she said.
Chris Rae, who lives opposite the house, said everything had been normal until Friday evening.
"The first thing I knew was when I left home about 8.20 on Friday night and all the cop cars were outside," he said.
"I was like, holy hell, what is going on? And it's been like that ever since."
