The blaze has closed off the popular mountain until tomorrow, as fire crews remain on site to dampen down any hotspots.
Police tonight appealed for help from the public to establish the cause of the fire.
A number of people were on the Mount last night, including several mountain bikers, Detective Senior Sergeant Greg Turner said.
"Police would like those persons and anyone else who may hold information about the fire to contact the Tauranga Police," he said.
A scene examination is due to take place tomorrow once Mt Maunganui is safe for staff to access the fire scene, police said.
Helicopter crews with monsoon buckets are remaining on standby to dampen flare ups.
A council spokesperson said the mountain will be closed until at least noon on Friday to give enough time for experts to assess the risk of rock fall and to ensure all hotspots were dampened.
Adams Avenue was now open but security would remain at the mountain to ensure public safety and manage emergency service access to the area overnight.
Three people had to be rescued from Mount Maunganui overnight as the fire, possibly started by a flare, took hold of the mountain.
New Zealand fire service assistant area commander Aaron Waterreus has confirmed reports of a flare sighted at the mountain just before the fire began.
Mr Waterreus said when firefighters arrived, there were three people on the Mount.
Firefighters prioritised getting those people down from the mountain. Once they were successful they were then able to focus on the blaze.
Mr Waterreus would not comment further on the people rescued.
A man fishing on a Mt Maunganui wharf says he saw a bright flare land high up on the mountain before a fire erupted in the same spot.
Ryan Biggar told the Herald he was sitting with mates at Salisbury Wharf when he saw a green flare lit up the night sky and headed towards the side of the mountain.
"We just saw it go up and it just sailed down in an arc direction.
"The fire started where the flare landed a couple of minutes after we saw it."
He said the fire did not take long to become an enormous blaze that spread quickly up the mountainside.
He could not tell if the flare had been set off on the land or from the water.
Mount Maunganui has been closed until further notice.
Tauranga City Council communications manager Aimee Driscoll said no one had been harmed in the "medium-sized" fire and there was no current risk to campers.
The fire has been contained but is not completely out with two helicopters with monsoon buckets dousing the fire, with a third on standby.
Tauranga City Council acting manager parks and recreation Warren Aitken said they hoped the fire would be out by this morning, and would then require a number of hours to dampen it down.
"Once the fire is fully extinguished we will need to assess the stability of the rocks to ensure they are safe before we open the area up to the public.
"We have cordoned off the area, closed road access and have security onsite. Can we please ask people, for their own safety, to stay way from the area until further notice," Mr Aitken said.
Each of the helicopters is able to carry 600 litres of water and each one is dropping massive buckets of water on the Mount every 60-90 seconds.
By 8am the helicopters have already dropped 53 buckets.
The 800-900sq m patch on the Mount is still smoking but Mr Waterreus said the helicopters would work for another hour before ground crews would get onto the Mount to tackle the fire by foot.
The fire broke out just before midnight and had been burning since.
It has destroyed vegetation on the northern side of the landmark Bay of Plenty mountain.
Mr Waterreus earlier described tackling the mountain-top blaze as extremely dangerous and posing difficulties for firefighters.
"It's quite steep terrain up all sides of the mountain so we have to be very careful.
"It's obviously dangerous, night-time, steep ground and it's on fire. It's a very dangerous situation and we have to be careful."
He said the size of the fire and flames were quite impressive.
Thanks to favourable conditions the fire had been contained to a relatively small area.
The fire service would be conducting a full investigation to determine the cause of the blaze.
In recent weeks, there has been a spate of arson attacks in the Tauranga and wider Bay of Plenty region, with several schools being targeted.
Last month saw the fire service attend to fires at three schools, including Merivale Primary School and Arataki School.
Radio New Zealand reported that an eyewitness had told police they saw what appeared to be either a lantern or a firework fall onto the Mount.
Fire Service northern shift manager Scott Osmond said around eight fire crews were battling the fire.
"In that area it's very steep country and it's simply inaccessible. All we can do is try and contain it without it spreading too much," he said.
Jody McGinity, who is camping at Papamoa, said last night the fire could be seen from the campground, about 16km away from Mt Maunganui.
"We were just sitting having a drink and then we wondered what the light was," she said.
They then realised it was a blaze, and called the Fire Service.
"It's spread about half way down the right hand side [of the Mount]," Ms McGinity said.
The large fire was spreading quickly, because of a strong breeze.
"It looks really bright."
Hamilton holidaymaker Jody McGinity, who is staying at a nearby campsite, said the mountain was looking ominous at daybreak.
"It looks dark on the top of the mountain this morning," she said.
Mauao Area Wildlife Trust spokesperson Julia Graham said the blaze was sure to have taken a tragic toll on the mountain's wildlife.
"The area where it was up the top near the rocks is the specific gecko territory so creatures like reptiles and lizards are going to be badly affected by this."
She also feared chicks would have died in nests.
"It's also right in the area where we've been seeing tomtits. It's the first time we've seen them up there for many years so if any have had a late nest there we've also lost our tomtits.
I think that's pretty tragic."
Mrs Graham said the trust, which has spent years trying to restore the vegetation and wildlife since fire swept through the mountain more than a decade ago, would survey the damage in a few weeks to see how badly the area was affected.
She praised the efforts of firefighters saying it could have been far worse had they not contained it.
Anyone with information is asked to contact Tauranga Police on 07 577 4300, or anonymously contact Crimestoppers on 0800 555 111.