A man wearing a gas mask opened fire after tossing a tear gas canister at a midnight showing of the new Batman film, The Dark Knight Rises, in Aurora.
A 24-year-old man was arrested in a car park nearby in possession of a rifle and handgun. One other gun was recovered from the theatre.
The suspect told police that explosives had been stored at his home.
Police chief Dan Oates told reporters that an apartment block in the north of Aurora had been evacuated as they investigated that information.
'No terrorism link'
US President Barack Obama has spoken of his shock at the incident, which began at about 00:30 local time (06:30 GMT) at the Century 16 cinema complex.
Mr Oates told a news conference the shooting was "a horrific event".
"Witnesses tell us he released some sort of canister," he added. "They heard a hissing sound and some gas emerged and the gunman opened fire."
"The shooting apparently went on for some time."
Ten people were killed at the cinema and four others died later in hospital of their wounds, he said.
The FBI, which is working with the police, says no terrorism link has been established.
Many ambulances attended the scene. Officials at the Swedish Medical Center, not the area's main hospital, told the BBC the facility had received several gunshot victims and expected more.
