Heavy smoke was reported coming from the kitchen area of El Rodeo, in the Brightleaf Square complex on West Main Street, just after 10 a.m.
The owner of the restaurant said the kitchen crew had to run for their lives.
"Grease was falling from the hood system down," said co-owner Andres Onate. "So, it was actually burning from the hood. They heard a boom! And right after the boom, they saw the hood system get red hot. And then they just got out."
Everyone made it out safely. However, Durham firefighters faced a dangerous task of dousing flames from the top level of the landmark building.
"The problem with these buildings is over the years the wood is dried out," said Durham Fire Chief Daniel Curia. "While the building itself is very sturdy, the connection points are not as strong as we'd like them to be. So there is the potential for the building to collapse."
The blaze was brought under control within two hours. The popular restaurant was left charred and waterlogged.
Onate vowed to save a piece of Durham's history.
"Everybody's OK," he said. "So that's the main focus. We can fix this. We're going to open it up. That's no problem."
There's no word on how soon the restaurant will open for business.
No one was injured.