The incident happened at Windsor Avenue in Lurgan.
The blaze started shortly before 1am in a building close to the New Haven cafe. Police said it suffered “significant damage”.
Nearby residents were evacuated during the emergency operation.
Images shared online show the property well ablaze, with flames and smoke billowing into the sky.
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The PSNI said they were treating the fire as deliberate.
Detective Sergeant Lewis said: “Shortly after 1am, we received a report that a house was on fire in the Windsor Avenue area of the town.
“Officers along with colleagues from the Northern Ireland Fire and Rescue Service attended and the fire was extinguished, however significant damage was caused to the property.
“A number of residents, who were evacuated while emergency services tackled the blaze, have been allowed to return to their homes.
“This is being treated as arson and I am appealing to anyone who witnessed anyone suspicious in the area or to anyone with CCTV or other footage that could assist with the investigation, to contact detectives on 101 quoting reference 74 19/07/25.”
The scene on Windsor Avenue in Lurgan, Co Armagh, where police are investigating an overnight arson attack on a property. (Pic: PressEye)
According to the NI Fire and Rescue Service, the blaze happened at a derelict three-storey, detached property, and the operation lasted until 4.15am.
Local MP Carla Lockhart said it was a major blaze.
“A significant fire has occurred in the building next to New Haven Cafe on Windsor Avenue,” she said.
“Everyone will know this well-known and historic building in the town centre. Emergency services, including the Northern Ireland Fire & Rescue Service, PSNI and paramedics, responded promptly and remain on site managing the situation.”
The scene on Windsor Avenue in Lurgan, Co Armagh, where police are investigating an overnight arson attack on a property. (Pic: PressEye)
She added: “I would highly commend the emergency services, particularly the fire service, police and paramedics for their rapid response. They put their own lives at risk to save others.
“This event marks a loss for the local built environment, and we know it will be noted by many across the community.”