The fire broke out at around 4.30 am in the house in Yushan Town in Changshu City.
The three people wounded face no life-threatening injuries.
A suspect, surnamed Jiang, has been arrested for his alleged involvement in the arson, police said, without giving any further information, state-run Xinhua news agency reported.
A total of 24 disaster-relief teams have been set up to offer legal and mental support to the families of the victims, the report said.