The fire occurred at about 8 a.m. in a courtyard apartment building at 11035 South King Drive and at one point, heavy smoke was blowing out from the building, CFD said.
The fire started on the second floor, which is where the girl was found. There was a substantial amount of debris in the apartment.
The Chicago Fire Department said Wednesday afternoon that the fire was caused by "electrical cords overheated by layers of items that stopped natural airflow."
Many people living in the building said they knew to get out when they smelled smoke and some even tried helping find the toddler.
"When they said there was a baby in there, we all knew who it was," one resident said. "I have asthma, so when I tried to get up there, and I got upstairs, we opened the door, it was engulfed in smoke and I just couldn't get in ... I wished I could do anything else, but I couldn't."
Loved ones arrived crying as they left a small tribute of bears and balloons to honor the young girl.
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"She seemed to have a magical personality. She always waved or smiled. She was a beautiful, beautiful child," said one resident of the complex who did not want to be identified. "This shouldn't have happened to such a wonderful little girl, and I can tell just by the reaction from her family and the people out here she brought love and life to a lot of people."
The family's belongings, burned and broken, were strewn across the ground outside as fire investigators worked to determine a cause.
The Chicago Fire Department said there were no working smoke detectors in the second floor unit where the fire seems to have started, but others were working in the hallway and in common areas.
Another neighbor who doesn't want to be identified said he and others tried to help before the fire department arrived.
"I personally myself ran upstairs with another neighbor to try to get in the house," he said. "We opened the door it was engulfed in smoke, the house was engulfed in smoke. And I just couldn't get in from there. I wish I could do anything else but I just couldn't."
Authorities have not released the identity of the little girl killed in the fire. The Red Cross is working with families who've been displaced to find housing nearby. No other injuries were reported.