People are being asked to keep their doors and windows closed as billows over residential streets.
The fire is so big it can be seen from as far as 10 miles away, and has even picked up by satellites orbiting Earth.
Firefighters are at the scene in Rushden but locals are now being warned to keep their windows and doors closed due to the thick black smoke the fire is producing.
The building was evacuated as the fire took hold and there are no reports of casualties. A major incident has now been declared.
The UK Health Security Agency in the East Midlands has said: "Due to a large fire @northantsfire is dealing with at a recycling warehouse on Sanders Lodge Ind Est in Rushden, Northants, there is a large smoke plume coming from the blaze.
"We'd like to advise people nearby to avoid the area and keep their windows and doors closed."
Northamptonshire Fire and Rescue Service's area manager Mick Berry, said: “This is a large fire that is having a significant impact on the Sanders Lodge industrial estate in Rushden.
“A multi-agency decision has been taken to declare a Major Incident, but fire crews are working extremely hard to prevent the fire from spreading and reduce the smoke plume.
“We would urge people to stay away from the site while emergency services deal with this incident and ask nearby residents to close windows and doors due to the large amount of smoke issuing from the site.
“We anticipate we will be on scene over the rest of the weekend, and we appreciate the impact this is having on local businesses on the estate and would like to thank them for their patience.”
The MP for Wellingborough and Rushden has thanked fire crews for “putting their lives on the line” this morning.

Labour’s Gen Kitchen said: “I want to say a massive thank you to Northamptonshire Fire & Rescue Service and Bedfordshire Fire & Rescue Service for putting their lives on the line.
“[They are] doing all they can to contain and minimise the impact on the local community.”
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