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"The United States believes that Russia is responsible for this assassination," one of several unnamed US officials told the newspaper, without saying which Russian group or agency undertook the killing.
Zelimkhan Khangoshvili, 40, was shot dead on August 23 after an assassination attempt four years earlier led him to flee Georgia.
German police arrested a 49-year-old suspect from Russia's Chechnya republic, where Moscow waged two bloody wars that lasted until 2009.
So far the German government has remained mum about its investigation. But the Journal reported that the investigation has involved Germany's foreign intelligence service, the BND.
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An official told the newspaper that the man arrested for the murder had been released recently from a Russian prison and provided a bona fide Russian passport under what appeared to be a fake name -- suggesting the Russian authorities were behind the operation.
The Russian government has denied it was involved.
"This case has nothing to do with the Russian state or official agencies," President Vladimir Putin's spokesman Dmitry Peskov said days after the murder.
"I categorically deny any link between this killing and Russian officials," he said.