The fire broke out at the building located 226 Locust Street near Main Street in Carlisle.
ABC 36’s reporter at the scene, Ian Preston, says flames were shooting out of the roof and windows as crews worked to contain the fire.
The fire is now under control.
The assistant fire chief in Carlisle tells ABC 36 News that a woman was spraying solution on her couch for bed bugs, when she dropped a burning cigarette and set off the fire.
Four people were transported to the hospital for smoke inhalation, including a handicapped woman from a neighboring building.
Main Street was blocked off to allow crews to battle the fire. Fire crews say nearby buildings have smoke damage. Crews from Bourbon County and Lexington are among those fighting the fire.