Bynes reportedly ignited a pant leg while setting a small fire with a gas can in the driveway of a Thousand Oaks home, according to reports.
A witness who called 911 reported seeing Bynes with a small gas can and was concerned it could explode.
Andrew Liverpool told reporters he saw "this girl lying down here with her left pant leg on fire and there is this gas can right here and it is trailing fire."
Liverpool said when he went to help, she had already managed to snuff out the flames on her pant leg.
The witness said Bynes was with a small dog and that when the man asked if she was OK, she said she was fine.
As he was moving the gas can away and others arrived to help, he said, Bynes left the scene and he found her on the next block. He said she then tried to leave in a cab, but he told the driver not to take her.
"When I look at her," he said, he realized "it is Amanda Bynes." He said Bynes claimed that her dog had been burned.
Bynes, facing drug charges in New York, was taken into custody for her own safety under California's Welfare and Institutions Code, known as a 5150 hold, after the incident, said Sheriff's Capt. Don Aguilar.
Deputies responded to a home in the 200 block of Avenida de los Arboles about 8:46 p.m.
"There was a call about a small fire that she'd apparently set in front of the residence, kind of out on a sidewalk on the concrete," said Sgt. Eric Buschow. "It wasn't an attempt to burn down the house or anything."
Buschow said the fire caused no property damage.
Aguilar said "deputies investigated the incident and determined that she met the criteria of 5150.... She was detained and taken for a mental health evaluation." A source familiar with Bynes' detention said she could be held for 14 more days if she is deemed a danger to herself or others.
It was the latest in a string of erratic behavior from the "Hairspray" and "She's the Man" star.
Her attorney in Los Angeles, Richard Hutton, said afterward his client was "fine" and recent reports were "exaggerated."
In the recent New York case, an employee at the 47th Street high-rise where Bynes lives reported to police that Bynes was smoking marijuana in the building's lobby, acting erratically and supposedly talking to herself, according to authorities.
Bynes has denied using drugs and said the alleged bong was actually a plant vase.