Connor Williams, 17, and Conor Tiley, 18, both from the Aberbargoed area, died on Sunday.
The car the pair were travelling in on New Road, Tir-y-Berth, Hengoed, crashed just before 19:30 GMT.
Gwent Police said the boy was being held on suspicion of causing death by dangerous driving, and inquiries were continuing.
The two victims along with 18-year-old Cameron Nicholas, who is being treated at Cardiff's University Hospital of Wales with serious injuries, were travelling in a dark purple Ford Fiesta.
Their car was in collision with a silver Vauxhall Astra whose female driver was not seriously hurt.
Anyone with information has been asked to contact police on 101.
A 17-year-old boy has been arrested following a crash which killed two other teenagers in Caerphilly county.