Firefighters, police and paramedics were called to reports of a blast at the Wessex Water site in King’s Weston Lane, Avonmouth, at about 11.20am on Thursday.
Police have declared a major incident following the explosion, which is believed to have involved a chemical tank.
Both fire and police have confirmed there have been “multiple casualties", however no further details were given.
The fire service, which sent crews from six stations, said it was still looking for people.
Avon and Somerset Police said there will be a full investigation into the cause of the blast.
Chief Inspector Mark Runacres added: "Officers remain at the scene and are likely to be for some time as we work together with other agencies in dealing with this major incident.
"A cordon has been set up and we'd advise members of the public to avoid the area at this time where possible to allow the emergency services to carry out their work.
"Police inquiries into exactly what happened are at a very early stage and are continuing."
Witness Jawad Burhan shared a photo on Twitter on Thursday afternoon showing a tank that had exploded.
He said there was a "helicopter looking for missing people" and police had closed a nearby road leading up to the building.
"I heard the sound; I'm working beside the building in another warehouse. After ten minutes I saw the helicopter coming and the police," he told PA news agency.
Kieran Jenkins, another witness, described how the warehouse he was in at the time of the explosion shook with the force of the blast.
He told ITV West Country: “The whole warehouse was shaking and me and my colleague were just stood there in shock and the next thing you know we hear people running over, screaming.”
The Avonmouth Recycling Centre and Reuse Shop are temporarily closed due to an incident nearby. We will reopen as soon as possible. pic.twitter.com/0DjvEnGcaX
— Bristol Waste (@BristolWaste) December 3, 2020
The fire service tweeted at 12.30pm: “We are currently responding to an incident after being called to a large explosion in Avonmouth.
“Crews from AFRS Avonmouth, AFRS Southmead, AFRS Yate, AFRS Patchway, AFRS Kingswood & AFRS Temple are in attendance.
“We are joined at the scene by ASPolice & swasFT colleagues. The incident is ongoing.”
Bristol Waste said its recycling centre and reuse shop, located near the scene, has been closed.
— Darren Jones MP (@darrenpjones) December 3, 2020
Darren Jones, MP for Bristol North West, said the explosion was the “second serious incident in Avonmouth in as many weeks” and that he would be calling on the Environment Agency and Health and Safety Executive “to ensure lessons are being learnt for the future”.
While Bristol mayor Marvin Rees said on Twitter: "Thank you to AvonFireRescue ASPolice and swasFT who are doing their very best to help all those involved.
"My thoughts are with anyone affected by this incident."
Deeply concerned at reports of a warehouse explosion in Avonmouth.
My thoughts are with those affected and our brave emergency services working hard to resolve this incident. https://t.co/jAvhBd2JKg
— Priti Patel (@pritipatel) December 3, 2020
Home secretary Priti Patel said in a tweet: "Deeply concerned at reports of a warehouse explosion in Avonmouth.
"My thoughts are with those affected and our brave emergency services working hard to resolve this incident."
Bristol’s Lord Mayor Jos Clark said her thoughts were with all those affected following the “terrible news”.