A family of five - two men and two women and a two-year-old boy - managed to escape the fire unhurt.
Miri Fire and Rescue Department chief Law Poh Kiong said the 1pm fire saw the squatter home totally destroyed.
He said firefighters had rushed to the scene upon receiving an alert around 1pm.
"The squatter house had five occupants but none of them was hurt," he said.
The Pujut 8 squatter colony is one of eight big squatter settlements in Miri.
Thousands of people live in these densely packed shacks built of wood and zinc sheets.
There have been previous cases of major squatter fires in Miri in the past years that claimed lives and rendered hundreds homeless.
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