Flames can be seen coming out of windows on all three floors of the Kettering Bedding Centre building in Regent Street, and a huge plume of smoke is visible across the town.
Residents are being told to stay indoors and nearby streets are being evacuated.
One resident said: "The smoke was really black and it looked like it was round the back. Then all of a sudden there were flames out the front. Glass went everywhere and the smoke was so thick."
Police have closed following roads:
Regent Street Wellington StreetHavelock StreetRockingham Road at the junction with Nelson Street
Residents are asked to keep their doors and windows shut to keep the smoke out while the fire service deals with the incident.
Motorists are also advised to avoid the area.