Gordon Thompson, accused of starting a "catastrophic" fire at a 144-year-old furniture shop, allegedly boasted about causing the blaze, which was so fierce that buildings on the opposite side of the road caught fire.
The House of Reeves in Croydon, south London, was set alight during the August riots last year. Residents had to flee from their homes as the fire raged and tramlines in the road burned.
A jury at the Old Bailey heard that Thompson admitted to local resident Jonathan Davis "it was me", as he walked away from the burning shop.
"As the defendant was jogging towards him, to the utter amazement of Jonathan Davis the defendant boasted, 'It's me, I did that, I burned Reeves Corner'", prosecutor Oliver Glasgow told the court.
Thompson is on trial for violent disorder, burglary of Reeves, arson with intent to endanger life and arson being reckless as to whether life was endangered, all on 8 August.
The court heard that as the blaze spread one young woman became trapped inside her flat and was forced to jump from a first-floor window into the arms of rescuers below.
He denies all the charges, but has admitted burglary of two shops in Croydon - Iceland and House of Fraser - on the same evening.
Allegedly Thompson stole a laptop from Reeves, before asking around for a lighter and setting fire to a sofa on display in the window.
Pictures of the furniture shop burning to the ground were some of the most dramatic images to emerge from the London riots.
The business was razed to the ground. Previously the store had stood on the South London site for over 130 years.
Glasgow described the August riots to the court, saying: "Men and women, apparently of all ages and backgrounds, descended on the streets determined to steal what they could and set upon causing as much damage as they were able.
"The defendant is one of those rioters."
The four days of riots that raged through London were allegedly triggered by the police shooting of Mark Duggan in north London's Tottenham on 4 August. Five people died during the disturbances and hundreds of stores were looted during the chaos that ripped across Britain's major cities, including Birmingham, Liverpool, Nottingham and Bristol.
The after-effects of the London riots were long lasting. Many families felt their businesses had been "ripped apart" by the rioters, their windows smashed and contents stolen.
Trevor Reeves, owner of family furniture store House of Reeves, said that his losses after the riots stood between £50,000 and £100,000.
One shop owner, Siva Kandiah, told The Huffington Post UK in December that he was still feeling the devastation, as he and his wife had struggled to claim compensation. They were still trying to recover both financially and emotionally from the riots.
Cross-eyed arsonist Andrew Burls was jailed for eight years on Monday, after he set fire to a shop and post office in Peckham during the riots. Although he obscured his face whilst carrying out the offence, his bandana slipped and police spotted his unusual eyes on CCTV.
The jury sitting on the Gordon Thompson case has been sent home until tomorrow.
Images from London's riots