"The fires continue to expand and create a situation of extreme peril for the firefighters, the residents and the businesses of the county," Mr Schwarzenegger's office said in a statement declaring the state of emergency for the area east of Los Angeles.
"The situation is beyond the capability and control of the county," it added, noting high winds fanning the flames which are threatening residences and commercial buildings.
Authorities said the fire was deliberately set early Thursday in a desert region 200 kilometres east of Los Angeles, and whipped up by desert winds that later sent it roaring over a fire engine and its five-man crew.
Four firefighters died and the other remains on life support in hospital with burns to over 90 percent of his body, the Los Angeles Times reported.
"These winds were devil winds. They came out of nowhere," Pat Boss, a US Forest Service spokesman, told the paper. "They were fleeing for their lives... and the flames caught them."
Officials say the deaths could be considered homicide. "This is a deliberately set arson fire. A deliberate arson fire that kills someone constitutes murder," Fire Department chief John Hawkins said.
"It's a very sad day for California," Mr Schwarzenegger said in the state capital of Sacramento.
Mr Schwarzenegger ordered flags be put at half mast for the dead firefighters as he instituted the state of emergency for the area of the fire, which allows the state to commit greater resources to combating the blaze.
The fire began near the town of Cabazon, and, whipped by strong winds, spread rapidly to ravage nearly 10,000 hectares of land and burn 10 houses.
More than 1,700 firefighters have been deployed on the scene, and 1,100 people have been evacuated from 400 homes threatened by the blaze.
Reward for arsonist capture
A US$300,000 reward is being offered for the capture of an arsonist behind the wildfire, Governor Schwarzenegger set a state reward of $100,000 which was subsequently tripled by the neighbouring counties of Riverside and San Bernardino, the site of the blaze.
The fire has added to the record destruction of US forest land this year by wildfires: more area has been charred across the country than any year since authorities began keeping records in 1960.
Nearly 4 million hectares have been consumed since the beginning of the year.
California's fires have been exacerbated this year by a severe heat wave. In September a fire ravaged 120,000 acres of mountainous forest northwest of Los Angeles. Another fire in July swept through the scrub desert and mountains north of Palm Springs.