A woman in her late 20s was later arrested on suspicion of murder.
The tragedy happened around 4am.
The fire was spotted by a neighbour. Joe Peel was woken by his dog.
He said: "I looked across the road and one of the house's doors was just covered in flames, so
Derbyshire's Assistant Chief Constable Steve Cotterill revealed news of the arrest at a press conference but he stressed that detectives were keeping an open mind about the cause of the fire.
Emergency services were called to the house on Victory Road in Allenton, Derby, just before 4am today.
Derbyshire Police said eight people, two adults and six children, were taken to the Royal Derby Hospital.
A spokesman added later: "Police can confirm that five children have died in a house fire on Victory Road, Derby.
"A sixth child aged 13 has been transferred to hospital in Birmingham for specialist treatment. The two adults are not seriously injured.
"The ages of the children who died range from five up to 10 years old. The investigation into the cause of the fire is at a very early stage and it would be wrong to speculate at this time.
"As the investigation continues further information will be released to the public. Anyone who can help the police inquiry into the incident should contact the police."
A woman in her 20s was arrested on Friday morning, a Derbyshire Police spokesman said.
Two adults also suffered minor injuries in the fire.
Neighbour Joe Peel said he was fast asleep when he was woken by his dog in the early hours.
He said: "I got up, I looked outside and it looked really foggy. I looked down the road and across the road one of the house's doors was just covered in flames.
"I grabbed my phone and started getting dressed as I was on the phone to the fire brigade. I ran out of the house, screaming to the neighbour to wake him up.
"I heard his voice, I couldn't hear anything else and I couldn't get in because it was just flames and smoke. A couple of minutes later the fire brigade came down with the police.
A sixth child has been taken to hospital in Birmingham for specialist treatment. "Two or three minutes later you could see the flames going up the stairs through the side window of the house. When the fire brigade came it was billowing smoke going up the road - it was absolutely horrible".
A Derbyshire Police spokesman said: "The investigation into the cause of the fire is at a very early stage and it would be wrong to speculate at this time."
Two adults were taken to the Royal Derby Hospital for treatment but "were not seriously injured", police said.
Anyone with information about the fire has been asked to contact Derbyshire Police.
I grabbed my phone and started getting dressed as I was on the phone to the fire brigade. I ran out of the house, screaming to the neighbour to wake him up.
"I heard his voice, I couldn't hear anything else and I couldn't get in because it was just flames and smoke. A couple of minutes later the fire brigade came with the police."
The targedy happened in Allenton, Derby.
Derbyshire Police said eight people, two adults and six children, were taken to the Royal Derby Hospital.
A spokesman added later: "Police can confirm that five children have died in a house fire on Victory Road.
"A sixth child aged 13 has been transferred to hospital in Birmingham for specialist treatment. The two adults are not seriously injured.
"The ages of the children who died range from five up to 10 years old. The investigation into the cause of the fire is at a very early stage and it would be wrong to speculate at this time.
"As the investigation continues further information will be released to the public. Anyone who can help the police inquiry into the incident should contact the police."
A woman in her 20s was arrested this morning, a police spokesman said.
Two adults also suffered minor injuries in the fire.
Mr Peel said he was fast asleep when he was woken by his dog in the early hours.
He said: "I got up, I looked outside and it looked really foggy. I looked down the road and across the road one of the house's doors was just covered in flames.
"I grabbed my phone and started getting dressed as I was on the phone to the fire brigade. I ran out of the house, screaming to the neighbour to wake him up.
"I heard his voice, I couldn't hear anything else and I couldn't get in because it was just flames and smoke. A couple of minutes later the fire brigade came down with the police.
A sixth child has been taken to hospital in Birmingham for specialist treatment. "Two or three minutes later you could see the flames going up the stairs through the side window of the house. When the fire brigade came it was billowing smoke going up the road - it was absolutely horrible".




