Emergency services were called to the art-house multiplex cinema on Badenerstrasse in the Kalkbreite area of central Zurich at around 7.30am after a passer-by saw smoke pouring out of the building, news agency ATS reported.
Firemen evacuated 40 people, but no one was injured.
The cause of the fire remains unknown, though it is thought to have started in the bar on the ground floor of the building.
The Houdini cinema, which only opened last August, occupies the first three floors of the seven-storey building which also comprises apartments, shops and restaurants.
Passers-by took to Twitter to photograph the early-morning activity.