Police found the dead man's brain and tongue on a plate in the apartment of a homeless shelter which the two men had been sharing.
The 19-year-old German, named only as Robert A., had blood around his mouth and was found next to the naked corpse, whose torso had been slit open from his throat to his genitals, police in Vienna said.
"The skull had been crushed with a 10 kilogram dumbbell," said Gerald Höbarth, head of investigation for the Austrian police, according to local media reports.
"The brain and the tongue were on a plate in the room next door." DNA tests are being conducted to determine whether there has been any cannibalism. "We can't tell at this stage," said Höbarth.
The apartment is in a hostel for homeless people in a Vienna tenement block. Neighbors said they had frequently heard the two men quarrelling.
Robert A. has so far declined to make a statement. "He's just been sitting there and not answering questions," said Höbarth. He has said that he comes from Cologne. The dead man was probably killed three days before he was found on Tuesday.
Media reports said Robert A. had shown a cleaning lady the body and said "Look what's happened!" He is believed to be suffering from paranoid schizophrenia, reports said.
The case has shocked the Austrian public, and the local tabloid media have been likening the case to that of fictional cannibal Hannibal Lecter, who in one scene spoons pieces of brain out of a live victim's skull.
It has also brought back memories of real-life German cannibal Armin Meiwes, sentenced to life in 2006 for killing and eating 20 kilograms of a Berlin computer engineer who was begging to be devoured.
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