Thames Valley Police (TVP) said a warrant for further detention has been obtained, giving officers longer to question the 31-year-old suspect.
Firefighters responded to the blaze at a building in Rowe Court, Grovelands Road, at around 3am on Wednesday.
One person has been confirmed dead following the blaze and two people are still missing.
On Thursday evening, the force said: “Our officers and colleagues from the fire service remain on scene today following yesterday’s major fire in Rowe Court, Reading.
“Specialist teams have spent today further assessing the structural damage to the building.
“The extent of the damage and the need to ensure the safety of those carrying out this work means we are likely to be working in the area for a significant length of time.”
It added: “A 31-year-old man remains in police custody having been arrested on suspicion of murder and arson.
“Today, a warrant for further detention has been obtained, giving officers longer to question the man.”
Four people were treated in hospital while another seven received medical care from ambulance crews at the scene.
The building was so badly damaged by fire that it has been left unstable.
Those affected by the fire in Reading are to be provided with “temporary respite accommodation”, the local council has said.
Witnesses heard an explosion and some residents were forced to jump from the building to try to escape the fire.
Others described a woman jumping or falling from an upper floor.
Doug Buchanan, from the Royal Berkshire Fire and Rescue Service, told journalists that firefighters had rescued one resident with a ladder while another was talked to safety by a call handler.
He said: “Our firefighters were able to rescue one of the residents from the building using a ladder, and our emergency call handlers gave fire survival advice to a resident that led them to safety, getting out of the property.”
The source of ignition of the fire is not yet clear.