The luxury five-star Randolph Hotel in Oxford was the scene of a massive blaze, with staff and guests forced to flee the building on Beaumont Street.
Around 14 fire engines were called to the scene while thick black smoke spread across the city, Oxford Fire and rescue Service said.
"The call was received by fire and rescue at 16:39 and a total of 14 fire appliances have been sent to the Beaumont Street hotel - including two high-reach appliances.
"Firefighters have not had to rescue anybody from the blaze and the building has been evacuated."
Thames Valley Police added: "TVP attending a fire in Beaumont St, roads are closed and nearby buildings are being evacuated as a precaution. Please avoid the city centre."
Eyewitness Anabel Bacon told the BBC that smoke "came erupting out of the hotel".
Ms Bacon, who was on the roof terrace of the Ashmolean Museum opposite the Randolph Hotel, said the smoke "stopped very quickly so we thought it was over, and then all of a sudden it resumed again with just as much force".
The entire top peak of the top tower in the middle of the Randolph Hotel was almost completely destroyed.
South Central Ambulance Service (SCAS) were at the scene and said its hazardous area response team was called. It stated that three people were medically assessed after inhaling smoke.
A police spokesman said: "The hotel and other buildings adjoining it have been evacuated as a precaution and there have been no reported casualties, nor has anybody needed to be rescued.
"There will be severe traffic disruption and motorists are asked to avoid the area."
A spokesman for Macdonald Hotels said: "Our immediate priority was to conduct the safe evacuation of all our guests and staff within the property.
"An investigation has already begun to establish the cause of the incident."
The Oxford hotel was a regular location in the TV series Inspector Morse, where it featured as one of the detective's favourite places to think through cases.
The extent of the damage to the Grade II listed Victorian building remains unclear. However, the fire is not believed to be suspicious and is thought to have started in the ground floor kitchen.