Fife Road in Kingston town centre was evacuated on Thursday following a blaze above a shop.
The fire was followed what a witness described as a loud bang above the party shop, Partica.
Kingston fire brigade said there were “around 40 firefighters” at the scene and the fire is not yet “under control”.
Clouds of smoke billowed from the building into the surrounding streets.
Customers in Orange, M&S and Virgin were evacuated.
Eight fire engines as well as police cars and ambulances rushed to the scene.
There was no immediate confirmation of the cause of the fire.
Police said they had closed Fife Road and part of Castle Street by Kingston station.