Spanish barman Francisco Arces Montez was taken before an examining magistrate after arriving in Rennes, near Pleine-Fougeres, the village where the attack took place.
Mr Montez, 51, was told by public prosecutor Roger Tacheau that he had been placed under investigation - one step short of being charged - for the rape and murder of the 13-year-old.
Caroline from Launceston, Cornwall, was staying at a youth hostel when she was assaulted and killed by an intruder as she lay in her bed near some of her classmates.
The private hearing on Friday formally triggers a renewed investigation into the attack but it is unlikely that Mr Montez will face trial for another year.
He arrived in France on Tuesday after being extradited from the US.
He was then transferred under heavy guard to the Rennes court from a remand centre in Paris.
Mr Montez requested an adjournment of four days, as he can do under French law.
He was remanded in custody at Rennes prison until Tuesday 27 November.
The examining magistrate leading the inquiry will continue his investigations before announcing a date for a trial.
DNA evidence
The departure of Mr Montez from Miami on Monday evening marked a major breakthrough in the inquiry.
French detectives had conducted 9,300 interviews and 3,800 genetic tests on members of the public with no concrete results.
Mr Montez, was named in the Sunday Times newspaper as a possible suspect, and the article was read by a US immigration officer who linked him to another inquiry in the States.
The extradition is believed to have been the first in American legal history based on DNA evidence.
US authorities waived court proceedings pending against Montez for breaking and entering and lewd behaviour to allow the French extradition to go ahead.
The alleged victim in the US agreed to the move.