Crowds gathered outside the former Squinting Cat pub in Leeds on Saturday after the blaze broke out at around 3pm.
Fire crews from Stanks station were among those who attended the incident on Swarcliffe Drive, while traffic was diverted away from the scene by police.
The West Yorkshire Police helicopter was also called out.
One bystander said at least 100 people were at the scene watching firefighters tackle the large blaze, which left smoke drifting across Swarcliffe.
It is on Leeds City Council’s list of derelict and nuisance properties and earlier this year planning officials said the “blight on the area” should be pulled down. A report to the planning board in May said the council owned the land, which it had leased out long-term before the pub closed.
The council was “looking at a joint disposal agreement with the current tenant for the sale of the council’s freehold interest”.