Fifteen fire engines and around 100 firefighters were called to a fire at a car workshop on Palmerston Road in Walthamstow.
A single storey workshop was destroyed by the fire. Most of the roof and half of the first floor of a neighbouring semi-detached house converted into flats were also damaged There were no reports of any injuries.
Borough Commander Richard Tapp, who was at the scene, said: "The whole of the workshop was alight as well as equipment and car parts within the single storey building.
"The blaze had spread to a house converted into flats next door and firefighters worked hard to bring the fire under control and prevent further fire spread.
"As the wind was quite strong it fanned the smoke so residents were advised to keep their doors and windows closed. The heavy smoke also prompted a high number of calls to our Control Officers.
"Palmerston Road and a number of surrounding roads were shut so we advised motorists to avoid the area where possible."
The Brigade's 999 Control Officers took 34 calls to the blaze.
The Brigade was called at 1400 and the fire was under control by 1550. Fire crews from Walthamstow, Leyton, Tottenham, Chingford, Woodford, Stoke Newington and surrounding fire stations were at the scene.
The cause of the fire is believed to have been accidental and involved welding.