Two people were treated for smoke inhalation and up to 60 residents were evacuated from the four-storey building in Tipton, West Midlands.
Emergency services were called to Greenlawns flats on St Mark's Road at about 22:00 BST on Thursday.
The teenager, from Tipton, is being questioned by police.
The fire is being treated as arson and is believed to have started as "a build up of rubbish", West Midlands Fire Service said.
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"A large number of residents were in the street after they had been evacuated from the block of flats," a spokeswoman from West Midlands Ambulance Service said.
"Firefighters used ladders to rescue the remaining eight residents from windows of their properties whilst also working to quickly extinguish the fire."
The two people people treated for smoke inhalation did not require hospital treatment.  There were no other injuries.
Andy Smith from West Midlands Fire Service said: "This fire is believed to have started as a build up of rubbish in an alcove."
"It serves as a reminder to ensure that accumulations of rubbish are removed as quickly as possible."
Steve Eling, leader of Sandwell Council, said: "Three people stayed overnight in the Tipton Sports Academy.
"Fortunately the rest of the residents were able to stay to arrange accommodation with friends and families."
The block of flats is privately owned.
A 16-year-old boy has been arrested on suspicion of arson after eight people had to be rescued from a burning block of flats.