The fire was set in a building on the 3900-block of West Argyle.
Roxana Ocampo, 23, and her daughter Itzel Fernandez,7, were killed in the fire.
Jovan Djurdilov, an 18-year-old alleged gang member, did not ignite the deadly fire, but Chicago Police say he was the lookout and that's enough to charge him with murder.
"He's every bit accountable as the person who started this fire," said Commander Joseph Salemme, Chicago Police Department
Police say on January 31, Djurdilov and other gang members used gasoline to set an apartment building on fire on the 3900-block of West Argyle.
Police say they were trying to target a rival gang inside the building.
"Arson was the terrible weapon chosen by members of one gang in the intended murder of a member of a second gang," said Salemme.
Police say the fire did not hurt the intended target. Instead, police say two innocent people who had nothing to do with the gang rivalry died from smoke inhalation - Roxana Ocampo who was pregnant and her seven-year-old daughter, Itzel Fernandez.
Police have charged Djurdilov with two counts of first-degree murder and aggravated arson. And police say another man in custody may be charged on Saturday.
"It's the stupidity of the gangs. Or they just don't care. You know, they set a fire and hope they get right guy and this time they got a pregnant woman and her little daughter. It's just unforgiveable," said Salemme.
Police also say the man implicated himself by giving a taped confession. He is held without bond. The name of the man in custody has not been released and he has not been charged at this point.
Chicago Police say that there may be more suspects they are now looking for.