A body has been found in the search for missing Whorouly woman Karen Chetcuti in bushland near Myrtleford in Victoria's north-east, Victoria Police say.

Karen Chetcuti was last seen on Tuesday night. ( Supplied: Victoria Police )

Police said they were yet to identify the body but believed it was Ms Chetcuti's.

The body was found this afternoon off Croppers Creek Road near the weir wall at Lake Buffalo about 1:35pm.

Police have questioned the neighbour of Ms Chetcuti over her disappearance.

Michael Cardamone, 48, spent the night in custody after he was arrested in Ringwood in Melbourne's east on Sunday morning.

No charges have been laid.

Ms Chetcuti, a mother of two teenagers, disappeared from the small Victorian town of Whorouly on Tuesday night.

She was reported missing by a concerned friend on Wednesday after she did not show up for work.

Following her disappearance, police found Ms Chetcuti's purse and handbag at her home, but her mobile phone was missing.

Her burnt-out car was found 20 kilometres away on Thursday.