The fire began in a high wind at about 10:30 p.m. in a grocery store and quickly spread to the frame buildings nearby. Despite a valiant effort by townspeople to fight the fire using the town's limited mid-summer water supply, the morning of July 5 saw Ellensburg in ruins. The Ellensburg National Bank and the City Hotel survived the blaze.
A tent city sprang up. Like many towns destroyed by fire, Ellensburg quickly rebuilt, this time using less flammable materials. The arrival of the Northern Pacific Railroad three years earlier meant that building materials could be brought in quickly by rail instead of laboriously by wagon. The demarcation "1889" on many of Ellensburg's historic buildings is a testament to this period of mass reconstruction.