Police say Saito escaped the state psychiatric facility on Oahu, where he had been detained since 1981 after being found not guilty of murder by reason of insanity.
Defense attorneys sought to have Saito released in 2000.
Maui County police say Saito flew to Maui shortly after he left the hospital, but they don't know where he is now.
"He is a very risky individual", said Wayne Tashima, a Honolulu prosecutor who argued in 2015 against Saito receiving passes to leave the hospital grounds without an escort.
Deputies arrested 59-year-old Randall Toshio Saito around 10:30 a.m.in Stockton after an alert taxi cab driver called police.
It's not clear under what circumstances Randall Saito was away from the facility in a Honolulu suburb.More news: Russian Federation says U.S. providing cover for Islamic State in Syria
In the early 2000s, a prosecutor in Hawaii called him a "psychopathic predator whose mental condition continues to represent a serious danger to the community". A 1993 court also denied Saito conditional release after finding he still suffered from sexual sadism and necrophilia.
Late Tuesday night, November 14th, the Hawaii Attorney General's office charged Saito with felony escape and issued a $500,000 bench warrant for his arrest.
The state Department of Health operates the hospital, which houses over 300 patients in Kaneohe. Prosecutors said she was chosen at random, shot in the face with a pellet gun, then fatally stabbed.
"It is disturbing that he was given that much freedom", said Irving Tam, who lives near the facility.
Tam said he heard about the escape from a neighbor, not the police, hospital or the media, and that patients have gotten out several times in the past. He was acquitted of a 1979 murder by reason of insanity and committed to the hospital.
He says the hospital will conduct an internal review once Saito is returned to custody and a criminal investigation is complete. Tashima is concerned that Saito could commit the same "very heinous and violent offense" again.