Videos showed chaos on the platform at Tsim Sha Tsui station, with the cabin on fire and one man lying with his clothes ablaze.
Videos showed chaos on the platform at Tsim Sha Tsui station, with the cabin on fire and one man lying on the platform with his clothes ablaze as bystanders tried to help him.
"According to our preliminary investigations and the statements of the injured, we suspect there was a resident (who) had lit combustible agents," deputy chief fire officer Yau Chi-on told reporters.
A government spokeswoman told AFP that of the 17 injured, two were in a critical condition. Yau said the victims suffered serious burns and had inhaled harmful fumes.
Police said they had ruled out terrorism as a motive.
"We have arrested this person for committing arson," police district commander Kwok Pak-chung told reporters, adding that the man was a 60-year-old surnamed Cheung.
"According to investigation up until now, we believe this incident was related to the personal issues of one person, an independent incident. No information at this point shows that it was an act of terror or an attack targeting public transportation," he said.
"When one of my colleagues brought one of the injured persons to the hospital, the person declared he was involved with the fire and that he had lit the fire," Kwok said.
An unnamed police source told the South China Morning Post (SCMP) that the man had said "burn you to death" before lighting a Molotov cocktail and catching on fire himself.
Photographs taken by passengers and circulating online showed people packed into a smoke-filled train cabin, and firemen rushing injured people out of the station in chaotic scenes.
"One man was completely on fire, his long trousers became shorts ... he crawled and fell, others helped to put out the fire," eyewitness Ray Chau told the SCMP.
"That train journey felt particularly long," he said. "There was nothing we could do but to inhale the smoke."
The city's leader Leung Chun-ying expressed his sympathy for those injured and called for a full investigation.
The incident is a rare occurrence in Asia's finance hub, where the transport network is known for its safety and efficiency.
In 2004, 14 people were injured on the subway when a man started a fire in the city's Admiralty station during the morning rush hour.
Mass Transit Railway (MTR), the company which operates the city's subway, said that trains were skipping Tsim Sha Tsui station, which services a popular shopping and nightlife district.