The actor, 56, rapped the lines of Carl Sandburg's poem 'Chicago' while 21-year-old Chance beat boxed next to him, reported Aceshowbiz.
A short video clip of Baldwin's performance was then shared online via Chance's Instagram account.
"This is me beat boxing while Alec Baldwin raps, he is for the people," Chance wrote in the caption.
He said the festival raised money for arts organisation Young Chicago Authors (YCA).
Baldwin later expressed his excitement to be a part of the fest, writing in a Twitter post, "Me and chancetherapper were on fire tonight. Like... A serious... You know... Burnin'... FIRE!! #Louderthanabomb.