The three-alarm fire gutted the Lake Motel in the Calumet Heights neighborhood, sending a firefighter and seven occupants to hospitals.
None of the injuries were serious.
Officials say the cause of the fire is still under investigation, but the motel manager says he thinks it was arson.
Without warning, flames engulfed the Lake Motel at 91st and Stony Island.
"I was sleeping in the room and the fire department came," said witness Gregory Joyner.
Calls to 9-1-1 for help began around 3:30 a.m. Saturday after several guests in the two-story South Side motel began to smell, then see smoke.
"In the bathroom, there was just smoke coming down all in the bathroom. You could smell it strong," said motel guest Joe Johnson.
Twelve fire engines and dozens of firefighters responded.
A combination of high winds and the construction of the 62-room nightly motel caused flames to spread easily.
"It had already gotten up into the plumbing chaise, then it ran down a hall chaise that runs the entire length of the building," said Chief Michael Fox, Chicago Fire Department.
Fire officials say they had the blaze under control by 8:45 a.m.
Seven motel occupants were hurt in the fire along with a firefighter battling the blaze.
He remains hospitalized in stable condition.
While some of the injured were taken to Advocate Trinity Hospital, other motel guests like Bonnie Williams, who were displaced by the fire, were placed on warming buses.
"The smoke was taking over. The fire started later. The smoke was taking over the whole building," Williams said.
The motel's manager -- who did not want to appear on camera -- told fire officials and ABC7 that the fire began on the first floor of the nearly block-long motel his uncle has owned since July 2003.
He says the fire was discovered in Room 109 by a motel housekeeper and maintenance man who tell him they smelled smoke, then found newspaper on fire in a bathroom before calling for help.
"Right now, everything is still under investigation in the cause of the fire," said Battlion Chief Jay Paramore, Chicago Fire Department. "Right now we want to make sure people outside stay outside for their own safety."
The American Red Cross of Greater Chicago was on the scene, providing assistance to occupants.
The motel manager says the owner plans to rebuild. It is still unclear if the building had working smoke detectors.