Firefighters responded to the scene, at the corner of NW State Street and NW Rhode Island Place, at about 5 a.m. after receiving reports of smoke and flames pouring from the apartment building.
Several people were inside the buildings when the blaze broke out. Most got out unharmed, but one person who had to walk through thick black smoke to escape was taken to the hospital for treatment of smoke inhalation.
The fire apparently originated on the second floor of the apartment building and spread from there to the rental home next door.
In all, 47 firefighters responded to the blaze.
There were no working smoke detectors in the apartment building, said Riverside Chehalis Fire Chief Jim Walkowski.
A total of seven people were displaced by the blaze. They will receive housing assistance from the American Red Cross.
The cause of the fire remains under investigation, Walkowski said.