About 40 fire fighters are tackling over 500 tonnes of domestic waste which is alight at the Wiltshire Waste (Recycling) Ltd plant in Devizes.
Six fire engines are currently working at the A342 Nursteed Road facility, along with additional support units.
Those living in the area have been advised to keep their windows closed and there have been reports of thick smoke being seen from some distance.
The cause of the fire is currently unknown.
Justin Finning, landlord of the Fox and Hounds pub on the A342, saw the fire in its early stages when he went to his stables in Sleight Lane at 5pm.
He said: "It was just white smoke, I thought they were burning some wood. You often see small fires around there.
"Twenty minutes later and there was a lot of big black smoke and fire engines coming from all directions. "