The blaze broke out at around 4:30pm at a disused Armor Salmon/Erin Foods factory beside Dr. Cullen Park in the town.
Locals have been told to stay indoors as firefighting services battle the blaze. The fire is reportedly releasing toxic materials into the air. The factory is known to have an asbestos roof.
Any residents not at home have been informed that they will not be able to return to their property for some time.
The Oak Park Road/Drive and Oakpark areas in Carlow town are currently closed, while the roads between the Athy Road Roundabout and Dr Cullen Park Roundabout are also off limits. Local diversions are in place.