The superseding indictment against Paul Smith, 49, Long Beach, includes the special circumstance of murder with torture, which could result in life in prison without parole.
Smith is charged in the slaying of Robert Haugen, 29, whose body was found nearly decapitated in his burning Sunset Beach apartment in 1988.
The Orange County District Attorney's office said in a written statement that DNA evidence obtained at the scene was matched with Smith after Smith was arrested for domestic violence in 2007.
Smith, who has been in custody since March, had known Haugen, a reputed marijuana dealer, since high school. The two apparently got into an argument that ended with Haugen being stabbed 18 times, officials allege.
The attack nearly decapitated the victim, which prosecutors contend amounted to torture.