The fire on the upper floors of the building on Rue Erlanger in the upscale 16th district of southwest Paris is the most deadly in the capital since 2005.
Dramatic footage from the scene showed flames shooting out of the windows and firemen climbing narrow ladders to rescue terrified residents, some dressed only in pyjamas, from the top of the eight-storey block.
The blaze left at least 10 people dead and 33 injured, eight of them firefighters.
Fire rages through the top floors of an apartment building in Paris, France. Source: BSPP
Police suspect arson
Paris prosecutor Remy Heitz said a 40-year-old woman who lived in the building and had "prior psychological problems" had been arrested near the scene, where the acrid smell of smoke still hung in the air several hours after the blaze was extinguished.
The woman "appeared drunk and was trying to set a car on fire in the street when she was arrested," a police source told AFP.
A 22-year-old neighbour told Le Parisien newspaper that his girlfriend had asked the woman to turn down her music late on Monday, prompting a flurry of insults that led them to call the police.
The couple later left their apartment while the police intervened, and upon their return bumped into the woman in the hallway.
"She wished me good luck.. then I smelled smoke and realised she had set the entire floor on fire," he told the paper, asking not to be identified by name.
"She must have set the fire outside my apartment to get revenge."
A judicial source said that after questioning, the woman had been placed in a psychiatric facility.
'Everyone was panicking'
By Tuesday afternoon, police were still gingerly searching through the building's blackened remains for any survivors with firefighters worried that structural damage might cause the top floor to collapse.
Police captain Valerian Fuet said around 50 people had been rescued from the block, some of whom had climbed on to the roofs of adjacent buildings to escape the inferno.
"Unfortunately, we could still make some unpleasant discoveries," Fuet said.
The fire started at about 1:00 am (0000 GMT) and it took around 200 firefighters more than five hours to bring it under control.
"At windows, people were yelling 'Help, help!' -- everyone was panicking," witness Humberto Ribas, who works in an adjacent building, told AFP.
Firefighters warn the death toll could rise as the fire was still burning on the upper floors of the building. Source: Getty
Another local, who gave his name as Nicolas, said he initially thought a fight had broken out when he heard a woman screaming.
"She was screaming, screaming and we went outside and the building was already on fire," he said.
Rescue efforts were initially hampered by the fact that the blaze was ripping through apartments facing an inner courtyard which had no vehicle access.
"They had the trucks, the big ladders, but they couldn't do anything," Nicolas told AFP.
Only once they had fitted extenders to their equipment were the firefighters able to begin rescue operations.
"The building was very difficult to access," Daniele Giazzi, mayor of the 16th district, told BFM television.
"Thoughts for the victims. Thank you to the firefighters whose courage helped save many lives," President Emmanuel Macron tweeted.
Standing at the police cordon, Jose Emilien was anxiously seeking news of his cousin and nephew who live on the sixth floor of the building.
"I called both of them," the 46-year-old builder told AFP.
"They're not picking up and I don't have any news."
Fire safety debate
The wealthy neighbourhood of both modern and classic Haussmann buildings is located on the edge of the Bois de Boulogne park, close to the Parc des Princes stadium of football club Paris Saint-Germain.
The fire is the most deadly in Paris since 2005 when an arson attack on a building in the southeastern 13th district killed 17 people, 14 of them children.
The worst fire in Paris since World War II was in April of the same year when 24 people perished inside a building used for temporary accommodation after a fight between two residents.
Tuesday's blaze follows a powerful gas explosion last month that killed four people in the city's central 9th district and is likely to renew debate about fire safety in the City of Light, where few old buildings have fire escapes.
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