It took about an hour for Fort Wayne firefighters to control a fire at the Coliseum Inn on North Coliseum.
Investigators say it started just before 3 p.m. in a down stairs room and then to the second level and did heavy damage to the structure.
About 50 people including six children were staying there at the time.
The Red Cross is trying to find temporary shelter for them. One occupant was treated by paramedics.