Sithembiso Mdlalose, 30, was denied bail and remanded in custody pending further investigations. His lawyer said Mdlalose would decide later whether to plead guilty or not guilty.
In August last year, a fire ripped through an abandoned building in downtown Johannesburg where dozens of families lived in appalling conditions. Health officials said 77 people died, including 12 children.
Infants were thrown from upper-story windows and many adult victims were found dead and incinerated, trapped against a security fence.
It was one of the worst urban fires in recent years anywhere in the world and was dubbed a wake-up call in South Africa, focusing concern on a housing safety crisis in the country's run-down inner cities.
SEE ALSO: South Africa Announces Official Inquiry Into Deadly Johannesburg Building FireThis week, Mdlalose reportedly presented himself before a commission of inquiry into the tragedy and confessed to causing the fire.
The suspect, a drug user with alleged ties to a crime lord operating in the building, said he had set a fire to cover his tracks after strangling a man during a bungled gangland punishment beating, according to an activist observing the inquiry.
In court Thursday, the suspect — a tall man in a khaki jacket and faded black jeans — stood with his head bowed and hands behind his back.
The case was postponed until February 1 for the state to verify Mdlalose's address and South African identity number.
"Bail is refused for you for now and you have the onus to convince the bail court of a balance of probabilities that exceptional circumstances exist for you to be granted bail," the magistrate, Ulanda Labuschagne, said.
Illegal occupation of abandoned buildings is widespread in downtown Johannesburg, which slumped into decay and economic decline in the 1990s.
City authorities said the municipal-owned building in a crime-ridden area had been turned into illegal housing after being abandoned, and possibly was run by a crime syndicate that collected rent from occupants.
Further investigations are under way, National Prosecuting Authorities spokeswoman Phindi Mjonondwane, told the press after the hearing, saying that prosecutors can not rely on evidence the suspect gave the commission of inquiry.
Mdlalose could face life imprisonment if he is found guilty of premeditated murder.