Fire crews were called out before 2 am to the La Costenita Taqueria on L Street near 7th Street.
Investigators believe it was an electrical fire that started behind the building's breaker box.
Firefighters were able to keep the flames from spreading to the attic.
"The heat from inside the breaker box got to a point where it finally started to burn the surrounding structural members and finally caused a fire," said Sanger Fire Chief Greg Tarascou.
The business will be shut down until PG&E teams deem it safe to reopen.
Firefighters said there was smoke and soot damage inside the building.
No one was hurt.