Black, thick, billowing smoke from the fire in the southern part of the city can be seen kilometres away — and health officials are warning it may contain carcinogens.
The fire is burning at McAsphalt Industries, which contains rubber and plastic products.
The smoke can be seen blowing across Highway 401 and drifting towards Oshawa, and the nearby communities of Courtice and Bowmanville.
Residents in the path of the smoke are being told to stay indoors and keep their windows closed.
Officials from the Ontario Ministry of the Environment have arrived to take air quality samples.
As a precaution a number of businesses have been evacuated, including the General Motors headquarters.
Darren Carl, who was driving on the 401 told CBC News he could see the smoke as far away as Bowmanville.
Asked to describe the smell he said it's a very "thick odour" and it smells like burning asphalt or rubber.
The McAsphalt plant is at the corner of Farewell Street and Harbour Road.
The fire was first reported just after 5 a.m. ET.
Oshawa Fire chief fire prevention officer Susan King said firefighters will probably be battling the fire throughout the night and into Sunday.
As long as the fire is burning there will be smoke, King said.
There have been no injuries reported.
Also on HuffPost