Mello was killed by a piece of Light's Death Note which Kiyomi Takada was given. She had managed to hide the piece of Death Note, and upon seeing Mello's face, she wrote down the name which Light knew was Mello's (from Soichiro saying it before the explosion at Mello's hideout). The fire was set by Kiyomi Takada due to Light writing her name into his Death Note and controlling her actions in order to burn the evidence as well as Takada and Mello.