The boy, whose name was not released, was taken into custody Saturday at a Calaveras County Sheriff's Office substation in his hometown of Valley Springs.
He is now being held in a juvenile detention center, NBC News reported Tuesday.
Leila was found stabbed in the family's home April 27. She and her brother had been alone at the time and he told investigators he had seen an intruder, sending authorities in search of a 6-foot-tall white or Hispanic male with a muscular build.
Mark Reichel, the boy's lawyer, said he stands firmly with his client and his family, KOVR-TV, Sacramento, Calif., reported.
Police have not released evidence they have that may point to the 12-year-old as the perpetrator, NBC News said.
Reichel said the boy may have made up a "macho" story about scaring off an intruder, but that didn't mean he was the killer.
Toddler uninjured after being knocked over by Obama family dog
Exploding whale video goes viral on Internet