Police said the man holed up in a video game store at the Roseville Galleria and started a small fire, which erupted into a larger blaze that damaged an entire arm of the mall.
The 1.3 million-square-foot Galleria was evacuated by the time the fire erupted and spread to the roof, and no injuries were reported.
City officials said part of the roof on the mall's south end collapsed. After the clouds of smoke had cleared, overhead television images showed the charred remains of retail stores, many of which were gutted.
Roseville Fire Department spokesman Dennis Mathisen said the fire burned a wing of the mall that appeared to extend several hundreds yards between two anchor tenants, Macy's and J.C. Penney.
He said water and smoke damage was extensive beyond that wing.
The Galleria, which is about 17 miles east of the state capital, generates about $3.2 million for the city in annual sales tax revenue and could be closed or limited in operations for months.
"This is a real blow. This is sad," Roseville Mayor Gina Garbolino told reporters.
She said city officials would do whatever they could to get the mall rebuilt "as soon as humanly possible."
The entire mall will be closed until authorities determine whether any parts of it can be reopened.
Police descended on the mall shortly after 10:30 a.m. when a man claiming to have a gun entered a GameStop store and told employees to get out.
"He was saying stuff about his family. The staff from GameStop was saying he was more or less incoherent," Roseville Police Lt.
Mike Doane said.
The employees said the man then barricaded himself in a back room and started a fire. He was hiding outside the store when a SWAT team entered the mall, and he was arrested without further incident.
Authorities had thought the mall's sprinkler system doused the blaze. But police later said the fire began spreading as members of the bomb squad were checking the man's backpack to see if it contained explosives, forcing them to flee the building.
Roseville police later identified the man as 23-year-old Alexander Corney Pigee, but also said his last name could be spelled Piggee. The man did not have a weapon when arrested, Doane said.
A Facebook page by someone of the same name - and spelled "Piggee" - says he lives in Sacramento and lists his hometown as Stockton.
KCRA-3 in Sacramento interviewed the man's mother, who said she told him to move out of the family house several months ago because he was old enough to live on his own. Since then, he had been rotating among family members, said the woman, Mary Carter.
"He wasn't a bad kid. I don't know what happened," she told KCRA.
She went on to say that her son had developed mental health problems in the past couple of years and that he recently was fired from a fast-food burger chain.
The man was taken from the police department to a local hospital later in the day.
Mathisen said fire sprinklers seemed to be controlling the flames Thursday evening, but firefighters had not been allowed in.
"The fire was able to get beyond the capability of the sprinkler system," he said.
Firefighting units were called in from surrounding communities to help douse the blaze, which could be seen for miles around the capital region and will have a long-lasting effect on the area's economy.
"We were all talking about how this was going to affect the holidays - it couldn't be worse," said Michele Witte of neighboring Rocklin, who frequently came to the Galleria at 5 a.m.
for "Black Friday" sales after Thanksgiving.
"Especially when they added some of the high-end stores, people would travel here just to shop," she said. "They came here instead of San Francisco."
The 240-store mall, operated by Westfield Corp., was built in 2000 and includes a Nordstrom. It underwent a $270 million expansion that was completed in 2008, adding Louis Vuitton, Tiffany and Burberry and other high-end stores.
Westfield Group spokeswoman Katy Dickey said there are no estimates yet on the cost of the damage.