No one was injured in the small blast, but Disneyland briefly evacuated the Mickey's Toontown section where the incident occurred Tuesday. The trash can did not blow up.
Christian Barnes, 22, of Long Beach was arrested for investigation of possessing a destructive device, just hours after the blast, Anaheim police Sgt. Bob Dunn said in a statement.
It wasn't immediately clear how police connected Barnes to the blast and Dunn did not return repeated calls. Police said earlier they would scrutinize social media and surveillance footage.
Disneyland spokeswoman Suzi Brown released a statement Wednesday saying the resort was working closely with authorities.
Barnes will be suspended or fired, she said.
Barnes, who worked as an outdoor vendor for the resort, was held on $1 million bail, Dunn said.
Dunn said Barnes was cooperating with investigators, telling them the blast was an isolated incident with results he did not expect, Dunn said. Dunn did not elaborate.
Barnes' father Raymond Barnes said he did not know exactly what happened, but thought his son was "just silly, not thinking" and messing around with dry ice without realizing the severity of what might happen.
"Whatever it was, there was nothing sinister about it," Barnes told KCBS-TV. "He's a good kid. Never been in any trouble."
Barnes' case had not yet been presented to prosecutors, said Farrah Emami, a spokeswoman for the Orange County district attorney's office. The bail amount could change when prosecutors get the case and charges are decided, she said.
Detectives found fragments of a water bottle in the trash can and believe Barnes placed dry ice inside it to create the explosion, the police spokesman said.
A telephone listing for a Christian Barnes in Long Beach rang unanswered Wednesday.
So-called dry ice bombs are easy to make, and on a much smaller scale, are sometimes used as classroom chemistry demonstrations, said John Goodpaster, an explosives expert at the Purdue School of Science at Indiana University-Purdue University Indianapolis.
The size of the explosion, however, can vary greatly depending on the container's size, material and the amount of dry ice used, he said.
The devices could cause injuries to those nearby if the built-up pressure was high enough, including cuts from flying bottle shards, he said.
"This is a simple device. It's not a pipe bomb filled with gunpowder, but it definitely will generate an explosion," Goodpaster said.
"If somebody was throwing something out, they could have been injured."
Copyright 2013 The Associated Press.