The Defence Force says a man accused of stealing more than 800 medals from the National Army Museum in Waiouru was trusted to work with a large collection.
Police on Wednesday arrested Queensland-based Keith Davies, 57, after he flew back to New Zealand voluntarily following a year-long investigation.
He appeared in the Wellington District Court in the afternoon on 18 charges. He was denied name suppression and released on bail after he surrendered his passport to reappear in court on 22 September.
The thefts of 843 individual medals are believed to have taken place between 1995 and 2002 and have an estimated value of $256,000.
The deputy chief of the army, Brigadier Charles Lott, told Checkpoint the medals are very important to the Defence Force.
"These medals represent people's courage and gallantry - certainly their commitment to the country.
"The fact that they have gone missing as they have of course devastates us as the custodians of New Zealand's national treasures, and I guess it will upset New Zealanders as well."
The Defence Force says 300 of the medals have been recovered.