Three appliances from the Isle of Wight Fire and Rescue Service are in attendance at a property above shops in the High Street, between St Johns Road and Pier Street.
Four firefighters have entered the building using breathing apparatus and a hose reel to tackle the flames.
UPDATE @ 16:20 – Fire crews are now leaving the scene in Sandown High Street after successfully extinguishing the fire.
Island Echo understand that a mother and her child evacuated the property and have thankfully escaped injury.
Crews from Sandowm, Newport and Ryde responded to the incident shortly before 15:00.
The road has now reopened to traffic.