Welding was revealed to be the source of the fire. At the time of the fire, the Garley Building was undergoing internal renovation, during which new elevators were to be installed. One had been completely refurbished, with another almost completed; the other two elevator shafts in the building had had their elevators removed, and bamboo scaffolding installed within the shaft. The fire-resistant elevator doors were also removed to allow light into the elevator shaft for the welders.
The welding activity routinely triggered alarms from the building's smoke detectors, so much so that staff at the China Arts & Crafts store that occupied the bottom three floors had wrapped plastic around the fire alarms to muffle the sound. Furthermore, workers were found to have cut metal with a welder, contrary to building codes. Thus, when a stray piece of hot metal fell from the thirteenth floor, sparking a fire in the second floor lift lobby, no one paid much attention, believing that it was part of the normal welding activity. A welder discovered the fire, and alerted the fire department. A second emergency call would be made one minute later, when a dental assistant on the 13th floor discovered dense smoke in the hallway.
When firefighters first arrived at the scene ten minutes after the lower fire had started, the fire was rated at one-alarm. It was almost immediately raised to three-alarm when heavy smoke impeded firefighters' process up higher floors. By the time reinforcements arrived, it was upgraded to five-alarm, the highest level in Hong Kong.
The fire consumed the bamboo scaffolding; the open elevator shaft provided a source of fresh air, creating a chimney effect that eventually rose to the 13th floor, starting another fire there. Charred human remains were found on the 13th and 14th floors. A workshop run by Chow Sang Sang Jewellery that occupied two rooms on the 15th floor had 22 bodies.