The fire, which has sent palls of black smoke into the sky above Milnsbridge, is on a unit at the Britannia Mills Trading Estate. At the height of the blaze, with more than 40 firefighters were at the scene, the roof of the building dramatically collapsed.
The flames are now said to be exinguished, but crerws remain on the scene damping down.
West Yorkshire Fire Service said crews have used water from the nearby canal to tackle the fire.
The blaze comes after the four-storey Drummonds Mill in Lumb Lane, Bradford was destroyed by fire in January.