The women in her 40s lived in the building that she is suspected of lighting ablaze on the rue Erlanger in the upscale 16th district of the French capital.
The suspect, who police said was “intoxicated when detained and attempting to set fire to a car”, is currently being held in a police psychiatric facility.
The woman had previous brushes with the law, including one for causing damage by fire, but she was never convicted of any offenses.
Sources close to the investigation said the woman had been released from Paris’s Sainte-Anne psychiatric hospital in late January.
Loud music caused altercation
She had repeated altercations with a neighbour, and was reportedly involved in a new dispute with him in the hours leading up to the fire.
The neighbour told French media that he had called the police after his girlfriend’s request for the women to turn down her music met with a flurry of insults.
The fire was the deadliest fire in Paris since 2005 and also injured 30 people.
Some 20 firefighters continued searching the building’s wreckage on Wednesday.