A resident of the apartment block in Gnosjö, central Sweden, notified police that a man was "acting aggressively" in the street.
"He allegedly was agitated, and potentially hurt someone as well," Jönköping policeman Klas Ottosson told news agency TT. "When we arrived we discovered a fire burning in his apartment."
Police evacuated the building, although the fire was relatively limited and it is likely no one would have been injured.
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"But there was apparent danger for the lives and health of others," Ottosson said. "The man has now been arrested on suspicion of arson."