An estimated 88 firefighters from 15 fire departments responded to the scene just after 10 p.m. after an Indiana State Police officer noticed flames as he drove by the restaurant.
After sitting empty for more than a year, the building recently came under new ownership and was set to reopen as Toor's restaurant, named after owner Mukhtire Toor.
Cloverdale Township Fire Chief Kerry Shepherd was among those who arrived at the scene to see flames and smoke shooting from the roof of the restaurant. He said the east wall of the restaurant appeared to have been forced outward, possibly from an explosion, but a cause has not been determined.
"It was a huge fire," Shepherd said. "It had a good start on us and we had our hands full."
Firefighters worked for several hours to extinguish the flames and remained on the scene until after 8 a.m. Thursday. Traffic on U.S. 40 was closed for six hours after the fire.
The State Fire Marshal's office is expected to be on scene today to determine a cause. Shepherd said the building appeared to be a total loss.
Responding to the scene were Cloverdale Township Fire, Greencastle Fire, Jefferson Township Fire, Reelsville Fire, Danville Fire, Mill Creek Fire, Cataract Fire, Roachdale Fire, Bainbridge Fire, Eminence-ANA Fire, Madison Township Fire, Fillmore Fire, Putnamville Correctional Facility Fire, Stilesville Fire, Poland Fire, Operation Life, Red Cross, Putnam County Sheriff's Dept. and Indiana State Police.