The fire started around 10 p.m. hours after the kitchen had closed at 1408 W. Madison St. Firefighters had to open up the roof and the ceiling to get water on the fire. The restaurant suffered "extensive" interior damage, fire officials said.
The cause of the fire is under investigation, according to CFD.
Palace Grill displayed autographed Blackhawks jerseys and a collection of celebrity memorabilia dating back 80-plus years.
"When I first got the call, I just assumed it was going to be something small and then my phone just kept blowing up and blowing up," Palace Grill owner George Lemparis said. "I immediately got in the car and drove here. When I got here, I saw the damage and I was stunned."
The Palace Grill has been a city institution since 1938. It has played host to Chicago athletes, elected officials, celebrities and families alike.