City officials said part of the roof on the mall's south end collapsed as huge clouds of black smoke poured from the 1.3 million-square-foot Roseville Galleria, which is about 17 miles east of the state capital.
No injuries were reported, but damage to the mall's roof appeared extensive.
The mall was evacuated earlier in the day after a man barricaded himself inside a shop and started what appeared at first to be a small fire.
Authorities had thought the mall's sprinkler system doused the blaze. Before the larger blaze erupted, police had detained a suspect and were checking a backpack they found to see if it contained explosives.
Police later said the fire began spreading as members of the bomb squad were examining the backpack, forcing them to flee the building.
"We weren't able to get in there because there was a potential bomb there," Sacramento Metro spokesman Christian Pebbles said.
Roseville Fire Department spokesman Dennis Mathisen earlier said fire sprinklers seemed to be controlling the flames.
Police descended on the mall shortly after 10:30 a.m. when a man claiming to have a gun entered the video game store GameStop.
He started a fire, then barricaded himself in a back room, but there were no reports of hostages or injuries, said Megan MacPherson, spokeswoman for the city of Roseville. The mall was evacuated immediately.
She said the man is believed to have acted alone. Police did not know a motive, she said.
Police and sheriff's deputies, including a county SWAT team, detained the man inside the mall. Roseville police later identified him as 23-year-old Alexander Corney Pigee. They were unable to immediately say if he had a gun.
A Facebook page by someone of the same name says he lives in Sacramento and lists his hometown as Stockton.
Firefighting units were being called in from surrounding communities to help douse a blaze that could be seen for miles around the capital region.
"I have no idea how this fire erupted again," Roseville Police Lt. Mike Doane said.
The 240-store mall, operated by Westfield Corp., was built in 2000 and includes a Nordstrom and Macy's. It underwent a $270 million expansion that was completed in 2008, adding Louis Vuitton, Tiffany and Burberry and other high-end stores.
Westfield Group spokeswoman Katy Dickey said there are no estimates on the cost of the damage because the fire was still burning. Dickey said management personnel was on site.
"It's an active situation," she said. "The evacuation occurred very smoothly, and the suspect is in custody."