Firefighters were called to the former Bond Theatre building in Carbonear on Wednesday afternoon, after flames engulfed the building and gradually turned it into rubble.
Firefighters were still dousing flames well into the evening as the old wooden structure continued to smolder.
Witnesses reported seeing smoke coming from the Water Street structure over the lunch hour, with streets around the building now closed to traffic.
Carbonear Mayor George Butt Jr. said things aren't looking good for the historic site.
"It's fully engulfed in flames, coming out through the sides, the roof, everywhere," Butt said.
Butt said a number of nearby buildings, including rental units and a bed and breakfast, had to be evacuated because of the heavy smoke.
The Bond closed as a theatre in the mid 1970s, but a section of it had more recently been home to a small business, The Trophy Hut. While the business had closed, the owner was still using some space for storage.
There are also reports that work was ongoing inside the structure shortly before the fire broke out.
There are no reports of injuries.
According to the Carbonear Heritage Society, the Bond Theatre opened around the same time that Newfoundland and Labrador joined Confederation, in April 1949.
The first film shown there was Razor`s Edge, a movie about an American pilot traumatized by his experiences in World War I.
The theatre was owned by United Movies Limited and was later bought by the Davis family of Carbonear.