The man, in his 40s, was released from custody at Letterkenny Garda station, 24 hours after his arrest.
A woman in her 50s is still being questioned. She was arrested this morning in the Letterkenny area.
The 67 year old victim was found dead in the bathroom of his home at Drumacanoo, Glenswilly in the early hours of Sunday morning last.
He had been strangled.
Mr Doherty was well known in the Letterkenny and Glenswilly areas.
Gardai still want to hear from anyone who may have seen him between 9pm last Saturday on Letterkenny Main Street and his death at around 1.40am on Sunday past.