Emergency teams were alerted to the blaze in Huff St just after 2am today.
"We had the Queenstown brigade respond," a Fire and Emergency NZ spokesman said.
"When they arrived they called for more resources straight away."
Firefighters then set about finding all the occupants of the badly damaged building.
"And by 2.22am, all persons had been accounted for and safe," the spokesman said.
St John told the Otago Daily Times that seven people were treated - four at the scene and three others were taken to Lakes District Hospital.
All were in a moderate condition, with at least one treated for smoke inhalation, and discharged this afternoon.
A firefighter was taken to hospital later by the brigade, as a precaution.
"At the height of the fire Queenstown, Frankton, Arrowtown, Cromwell and Alexandra were in attendance."
A fire investigator was now at the scene examining the cause of the blaze. However, it was not thought to be suspicious.
The blaze flared in an area above the Old Wakatipu High Shcool where many properties date back to the 1960s, with the flames visible across Queenstown for well over an hour, a photographer at the scene said.
- Reporting by John Lewis, NZ Herald