The 49-year-old barman who lives in Loulé, is suspected of having set several fires on Saturday before being caught deliberately starting a fire near Foia that afternoon.
Broadcaster RTP reports a source close to the case said the man has blamed his actions on taking too much medication for anxiety and depression.
Around 400 firefighters, scores of fire engines and eight tanker planes were last weekend involved in tackling the massive blaze in the Algarve’s Monchique mountain range, near the region’s highest point, Foia peak, and which raged on for more than 24 hours.
During the course of the weekend, groups of fire-fighters from Lisbon and Évora joined the efforts in Monchique.
By Monday morning the fire was under control and operations on the ground were winding up.
The suspected arsonist was caught red-handed after police boosted their patrolling of the area following several smaller fires that created a trail to the culprit.
The man was caught in the act as he was setting fire to scrubland and was handed over to PJ police, who conducted an investigation.
He will be held in police custody pending trial.