West Yorkshire Fire and Rescue Service (WYFRS) said that multiple vehicles and tyres were involved in the fire.
Smoke could be seen billowing across the city causing Wakefield Road and Ossett bypass to be closed and people asked to avoid the area.
Wakefield Council tweeted reports of the blaze, asking people in the area to stay safe due to the increasing amount of smoke.
Witnesses say the smoke could be seen from as far as Huddersfield.
Ten pumps were sent to the scene to tackle the fire, including crews from Ossett, Wakefield, Pontefract, Normanton, Hunslet and Dewsbury.
A spokeswoman from WYFRS said: "We were called at 2.45pm to reports of a fire at a scrapyard on Wakefield Road in Ossett.
"No casualties are reported."
Firefighters are now damping down with four crews still at the scene.