The fire broke out at The Admiralty pub shortly before 5.50pm on Tuesday, and huge plumes of smoke could be seen billowing from the building.
Some 10 fire engines and 70 firefighters were originally called to the scene, but this was later increased to 20 fire engines and around 125 firefighters amid “arduous” conditions.
The London Fire Brigade said half of the pub’s basement was alight but had brought the fire under control by around 10pm.
Fire crews from Soho and surrounding fire stations attended the incident.
Station Commander Keith McDermott, who is at the scene, said: “Due to the arduous, challenging and hot conditions inside the basement we’ve increased the number of fire engines and firefighters at the scene.
“Around 150 people evacuated the pub and surrounding businesses before the brigade arrived.”
There have been no reports of any injuries and the cause of the fire is under investigation.
The blaze comes amid a heatwave, with soaring temperatures reaching 30C in the capital on Tuesday.
The fire brigade gave an update on Twitter around three hours after firefighters began battling the flames.
A spokesperson said: “Steady progress is being made at the Trafalgar Square pub fire. We’re likely to be at the scene for hours to come.
It’s a hot night so crews are taking on a lot of water. Please spare a thought for all firefighters dealing with fires in these conditions.”
The pub said on Twitter: “Due to the current situation The Admiralty is closed until further notice. We’ll update our website and social channels in due course.”