On 30 December 2004, a fire broke out in the club, killing 194 people and injuring 714 others. The venue was playing host to rock group Callejeros and around 1,500 people were in attendance. Speculation is that the blaze was started when a pyrotechnic flare (a popular device in New Year's Eve celebrations) was set off and ignited foam in the ceiling. The materials used in the building for decoration were inflammable: mostly wood, styrofoam, acoustic panels and a plastic net (a so-called media sombra). This plastic net was hung from the ceiling and caught fire first, melting into a rain of fire. In some parts of the building, teddy bear stuffing was used as a cheap alternative to wool fiber. The owner and the band's lead singer had told the patrons not to use flares inside the building.
Four of the six doors, some of which were fire exits, were wired shut so that "people would not enter without paying", according to mayor Aníbal Ibarra. Most of the victims died from inhaling poisonous gases, smoke and carbon monoxide, unlike most accidents of this kind, where most die from crushing or burning. Some small children and babies, kept in an improvised nursery operated in the ladies' washroom upstairs, were also killed in the fire.
Following the disaster, an Argentine judge issued a national and international arrest order against Omar Chabán, local businessman and owner of República Cromagnon and other nightclubs, including one called Cemento that had been closed by court orders many times before. Chabán was located at one of his houses in the neighbourhood of Monserrat and was arrested. Police are now seeking those responsible for setting off the flare. If they are found (some reports say they have already been identified and that they are children), then they could face eight to twenty years in prison.
On 20 December 1993, a fire at the nightclub Kheyvis caused the deaths of 17 teenagers and is believed to have been caused by the burning of furniture as a prank, although no one was charged with starting it. The Kheyvis fire led to tougher regulations, including mandatory emergency exits and extensive security inspections of existing nightclubs. Until the República Cromagnon fire, the Kheyvis fire was the worst nightclub tragedy in Argentine history.
It later became known that República Cromagnon was overdue for a fire hazard inspection since late November 2004. Although Mayor Ibarra blamed the Fire Department of the Argentine Federal Police (responsible for the inspections), several flaws in the city's inspection system surfaced. Coupled with the city's poor capability to handle a disaster of this magnitude, critics pointed to Ibarra for failing to reorganize Buenos Aires' inspection system. A few days after the fire, Ibarra reshuffled the entire Buenos Aires security and emergency administration. The City Legislature announced that Mayor Ibarra was going to face a questioning session. However, the Legislature failed to achieve the necessary votes to question Ibarra. Shortly after, Ibarra voluntarily submitted to a questioning session, and announced a recall referendum to decide whether he would remain in office or not.
Relatives and friends of the dead organized several marches to Plaza de Mayo demanding the resignation of Aníbal Ibarra as Mayor of Buenos Aires, the conviction of Omar Chabán and more efficiency in the inspection system. Some of these marches ended with incidents between protesters and the police.
President Kirchner also suffered heavy criticism for his actions (or lack of them), especially for staying at his holiday retreat of El Calafate, Santa Cruz, instead of returning to Buenos Aires, and for remaining silent for five days. Kirchner responded in an aggressive manner, blaming the criticism on the yellow journalism and on journalists "full of hatred", explaining his decision not to return to Buenos Aires as trying to avoid sensationalism. Critics of the President have contrasted Kirchner's actions during the Cromagnon tragedy with his actions during the collapse of a mine shaft in his home province of Santa Cruz, when he quickly went to the site.
On 2005-11-14, an impeachment jury formed by a commission of the Buenos Aires Legislature suspended Mayor Ibarra for four months, pending investigation of his performance that could lead to his destitution. He has accused the opposition of manipulating the families of República Cromagnon's victims in order to ruin his career.