Firefighters were called to the scene after a member of the public spotted flames from The Old Chapel, New Bank Street, at around 11.30pm.
Watch commander Sean O’Flynn, of Hunslet Fire Station, said: “The building was well alight, you could see flames coming out from the roof.
“By the time we had found a hydrant, got it to work and got some jets working, it had broken through the roof.
“We were all there until about 3am, it was a very significant blaze. Due to the age of the building and the amount involved in the fire, there was a risk of collapse.
“A number of households opposite the building and next to it were evacuated and they were not allowed back in all night.
“The structural engineers was concerned about the possibility of collapse and recommended some flats were also evacuated.”
Fire crews from Morley, Hunslet and Leeds as well as specialist officers were called to the scene.
Crews used two large jets, two ground monitors and an aerial appliance at the scene. The cause of the fire is under investigation.
Chapel Hill is currently closed in both directions between the Station Road junction and the New Bank Street junction.
This is also affecting New Bank Street between B6127 Church Street and Croft House Grove.