West Yorkshire Fire & Rescue Service was called to the incident at about 7am on Sunday morning.
Fire crews have advised people to keep doors and windows closed while the incident is dealt with.
A warning said: "The fire, which is at a scrap yard, is under control. Smoke plumes have been created by the fire and are travelling with the wind in the direction of Halifax Town Centre.
"Please keep doors and windows closed if you are nearby or there's smoke in the area. Firefighters anticipate being at the site for the rest of the day damping down following the fire."
A spokesperson for the service added: "Six fire engines are in attendance at a building fire in Farrar Mill Lane, Salterhebble, Halifax.
"Our Control Room received a call to the incident just after 7am today. It is creating a lot of smoke in the area. Local residents are advised to keep doors and windows closed.
"Fire service are currently dealing with a fire involving skip waste material used for recycling, measuring 50m x 50m – We have 6 firefighting pumps in attendance with 6 large jets in use, 1 Aerial appliance, 1 ground monitor and 1 ultra light portable pump. Exposure risk to 1 side of the building.
"Appliances from Rastrick, Cleckheaton, Illingworth, Halifax, and 2 from Huddersfield attended, along with specialist appliances from throughout the Brigade."
One Twitter user who posted a photo of the fire said he could see the smoke pouring from the blaze from three miles away.
He said: "Something odd about this cloud," before adding: "Time to disappoint, it's not a cloud but smoke from a fire in Halifax three miles away. Hay ho!"
Twitter user Stephen Naylor added: "Wondered why the sky was grey on a sunny day then looked out the window and saw the huge plume of smoke - and we’re six miles away."
The fire appears to be a blaze at a scrap metal yard in Halifax, as these photos and video show.
Keep following for more updates as we get them.