The fire broke out about 4:30 a.m. and was first reported by a passer-by who saw flames shooting from the roof, said Bob Burbridge, assistant fire chief of Mason County Fire District 4.
The 27-year-old building, formerly known as the Mill Creek Inn and later the Doowop Diner, had no sprinklers or fire alarm, he said.
More than 50 firefighters from Mason, Thurston and Grays Harbor counties joined in battling the flames over a period of several hours.
''The biggest issue here was that there's no water supply'' at the scene, Burbridge said. About 12 water-carrying fire trucks relayed water from area hydrants to the building, he said.
No one was hurt. No estimate of damage was available Sunday night.
Burbridge described the fire as ''suspicious with the cause undetermined.'' Fire investigators are looking into the cause.