The blaze ripped through the terraced house on Ambrose Rise in Dedridge in the early hours of the morning, with firefighters battling the fierce flames for more than two hours.
A 23-year-old woman, named locally as Angela Campbell, who had only recently moved into the home, died at the scene.
It is understood that her children were staying with relatives when the fire broke out, at around 4:40am.
Keith Porteous, 33, who lives in the house next door with his parents, said the burning house was "engulfed" in flames.
He said: "My mum came to wake me up and said, 'you need to get out the house, next door is on fire'. I ran out with only my boxer shorts on – the house next door was engulfed.
"I didn't really know the girl. She only moved in a month or two ago."
Neighbours said the woman who died had friends over on Friday night before heading out to local nightclub, Club Earth. The cause of the fire is not yet known.
Bouquets of flowers were laid near the home by family and friends following the tragedy.
One message read: "Hey cuz RIP, can't believe you're gone, love you cuz" while another read, "You'll never be forgotten, one of a kind."
Mother-of-three Lyndsey Smith, 32, who lives on the street, said:
"I heard what sounded like a gunshot or a car backfiring at about twenty to four in the morning, it made me jump. I was still awake and I looked out my window, but I couldn't see anything."
Cathy Coen, 39, who also lives on the street, added: "There were flames shooting right out the house. It was scary to see because I couldn't believe the speed of the fire.
"When you see the state of the house, anyone inside would have had no chance."
Although the fire had been extinguished by just after 7am, Lothian and Borders Fire and Rescue Service said there were fears the building was in a "dangerous condition", with appliances remaining at the scene throughout Saturday afternoon.
Part of the street was cordoned off by police, with forensics and the fire investigation team also in attendance.
A spokeswoman for Lothian and Borders Fire and Rescue Service said: "The BA (breathing apparatus) teams had to be withdrawn due to the structural integrity of the building.
"At the height of the incident, there were six fire appliances and 24 firefighters."
A Lothian and Borders Police spokesman said: "An investigation is now under way to establish the cause of the blaze."
Crews also battled fires in West Lothian and Portobello during a busy weekend.
Thirty-five fire fighters attended a fire in a large area of forest near to Falla Hill in Fauldhouse, West Lothian.
A spokeswoman for the fire service said they could not rule out the possibility that the fire had been started deliberately.
And crews were called to The Esplanade Bar in Portobello on Saturday.
The electrical fire broke out in the basement of Bath Street bar at around 11:20am.
The fire caused minor smoke damage.