Police and firefighters were called to the scene just before 9:30pm.
They arrived to fund the fishing boat Shun Lai ablaze, anchored among a group of other fishing boats near the mangroves along the bank of the canal about 100 metres from the Asian Marina Pier.
Firefighters took two hours to bring under control the fire, which was ablaze near the bow of the boat.
Although the boat has a steel hull and it had no equipment on board, it was fitted with wood and fiber, causing it to burn quickly, fighters explained.
What caused the fire is under investigation, said police.
No people were reported as injured as a result of the fire.
The Shun Lai was one of nine boats that arrived in Phuket to make repairs in September 2016, with authorities being presented documents claiming that the boats were registered in Bolivia.
Checks by the Phuket Marine Office confirmed that none of the boats were registered or had been issued any fishing licence in that country, prompting Royal Thai Navy personnel to intervene and seize the boats - but not before two of them manage to flee. (See story here.)