Bryan Lee Kitchen, 31, was being held on a charge of first-degree arson, police said. No motive was given.
Kitchen had been a suspect since the July 14 fire, which was labeled suspicious from the start.
The fire destroyed 88 units that were under construction at the Grove apartment complex. Many of the units were already rented to Washington State University students. The fire also destroyed three pieces of construction equipment and damaged a dozen more.
Kitchen, of Pullman, was arrested Monday afternoon and "subsequently made admissions that led investigators to believe he was involved in setting the fire," police said in a news release.
There was no phone listing for a Bryan Lee Kitchen in Pullman or the surrounding area, and it was unknown if he has an attorney.
Kitchen worked for a plumbing subcontractor at the construction site, police said.
He was a suspect since the morning of the fire because his unoccupied vehicle was spotted near the scene by a Pullman police officer, police said. Kitchen was contacted several times during the investigation and taken to the police station for questioning Monday, police said.
The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives has been involved in the investigation, and the U.S. attorney's office in Spokane will review the case for possible federal prosecution, police said.
Pullman Fire Chief Mike Heston has said the fire was immediately suspicious because there was no heat source that could have sparked it. No one was living in the buildings, and there were no injuries.
The fire was reported around 3:15 a.m. and took two hours to contain. The 100-foot-high flames claimed half of the eight unfinished buildings. Many of the construction vehicles on site were full of fuel that ignited, causing several ground-shaking explosions.
The Grove had beds for 584 residents in its eight buildings. The fire left many students wondering where they would live as the school year approached.