The Mayfair Hotel is a 15-story residential hotel, so there were dozens of tenants and guests who had to evacuate.
Firefighters knocked down the fire quickly. The blaze burned in a ballroom on the third floor of the hotel.
Fire officials said a broken riser pipe that carried water to the upper floors and the sprinkler system sent a lot of water cascading down the stairwells and into at least one elevator shaft.
Parts of the 84-year-old building will need to be replaced.
Some residents were awake when the fire started.
"About 20 firemen come up running and they tell us, 'Go to your rooms! No, no, no get out of here!'" said third-floor tenant Joel Alvarado. "We're just running around in circles not understanding, but the smoke and the smell were just clouding our lungs."
Alvarado and his roommates recently moved to the hotel from Indiana. They were still trying to figure out what to do Thursday morning, because they were not allowed to go back into their room.
Los Angeles City Fire Department officials said people who were staying on the lower floors should be relocated into some of the vacant rooms in the upper floors.
Alvarado said he did not hear where he was going to be relocated to, and he didn't know how much water damage there was in his room.
No one was hurt, and the cause of the fire remained under investigation.