Fire crews were called to the blaze at the former Zanzibar club and Bethel Community Church in the Stow Hill area of Newport at 6.19pm on Friday, authorities said.
Images posted online showed the air heavy with dark smoke with large flames burning right through the church.
Around 40 residents were evacuated as a precaution, with others urged to keep doors and windows closed, Jennie Griffiths, joint head of South Wales Fire and Rescue Service said.
More than 70 firefighters using 10 fire engines and 11 supporting appliances, including a crane, were needed to bring the blaze under control.
Flames appeared to die down at around 9.30pm according to witnesses on social media, with the structural stability of the two-storey building being assessed by officials, Ms Griffiths said.
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