People attending for prayers were evacuated from the building after the ground and first floors were hit.
Ambulance officials say one man has been taken to hospital with smoke inhalation but there are so far no other injuries reported. Up to 10,000 people can fit inside the mosque.
It is understood up to 50 per cent of the mosque is alight.
Phil Morton, station commander for Croydon fire station, said the cause of the blaze is still unknown.
He added: “We are working very hard to control the fire but, as it’s such a big building with such high ceilings, I imagine it will take a while yet.
“We are using an aerial appliance to apply water to the roof – a fire break to stop the fire spreading.
“We expect a large amount of the building to be damaged.”
Merton Council leader Stephen Alambritis described the mosque as a “major landmark” in the area.
Damage to the “beautiful building” will be a “big blow” to the community, he said.