About 30 residents have been evacuated and part of a building has been destroyed following a suspected explosion.
London Fire Brigade said it was called to a fire after the suspected blast on High Street in Hampton Hill, south-west London, on Tuesday night.
On social media, one witness described hearing a “boom” before the blaze. No was injured.
Road closures remain in place at the scene, Richmond Council said.
More than 350 people were arrested across both days of the Notting Hill Carnival, the Met Police has said.
A Section 60 order, giving police additional stop and search powers, was enforced on Monday after reports of “incidents of violence”.
Thirty officers suffered minor injuries at the event, with 37 people held for assaults on police.
Cdr Dave Musker said he was “happy” with how Carnival went but “extremely disappointed” by the attacks.
“Officers put themselves on the frontline and should, under no circumstance be assaulted for protecting the public,” Cdr Musker, who was the Met’s lead officer for the event, said.
By 22:00 BST on Monday, 353 arrests had been made with 111 on Sunday and 242 on the second day of the event.
The majority – some 162 – were for drugs, while 34 were for possession of offensive weapons, 31 for public order offences and 10 for sexual attacks.
An additional 30 arrests related to the event were made by British Transport Police on London’s transport network.
A Section 60 order had been authorised for specific stations, lines, and trains on Monday “to protect the travelling public and prevent serious violence”, the force said.
More than one million people attended the festivities as record temperatures were recorded in west London.