The fire, which started inside a tyre pile at the back of recycling plant Tyre Crumb in Maygar Boulevard in Broadmeadows, began shortly before 9am on Monday.

It has since burnt through more than 70 per cent of the junk yard's tyre pile – about 150,000 car and truck tyres.

More than 100 firefighters from multiple agencies were continuing to battle the blaze using foam late on Monday, and many would remain overnight.

Despite drops of up to 10,000 litres of water a minute and retardant bombed onto the fire, it was still out of control on Monday evening, but contained within the yard.

Water bombing helicopters that were being used to contain the flames had to be stood down once thunderstorms brought a change in wind direction just after 4pm. 

A Metropolitan Fire Brigade spokesman said while the rain had been welcome, swirling winds and stormy conditions had added to the challenge.

With the huge, plume of toxic black fumes emanating from the fire visible from as far away as the Mornington Peninsula, the MFB warned residents near to the fire to turn off air conditioners and keep doors and windows closed.

"We understand that people will be concerned about the smoke that they see ... we really just want people to stay indoors and close their windows," incident controller David Yousef said.

"All smoke is toxic but at the moment, because of the wind conditions, fortunately it is not coming down to ground level so we don't have any significant concerns for the community.

"We would ask people to continue to monitor the media and maintain a watch on what's going on."

Deputy incident controller Andrew Zammit told a community meeting in Broadmeadows on Monday afternoon that toxins in the air were within "tolerance" levels.

He said given the experience of the Hazelwood mine fire of 2014, they were "mindful" of monitoring the air particles every 15 minutes with assistance from the Environment Protection Authority.

Mr Zammit said they were also working with the agency to put measures in place to prevent fire run-off from infiltrating nearby waterways.

The fire could continue burning for the next 24 to 36 hours.

"There is a lot of rubber there and a lot of fuel there to burn so it is proving quite challenging for firefighters," incident controller David Youssef said.

"Tyres fire are very difficult to extinguish and they can often burn for more than a day. That is why we are pulling out all the stops to try and bring this fire under control."

The firefighters had been supported by two water-bombing helicopters, creating a further spectacle for a number of bystanders.

"It's not often you see something like that," Coburg's Ben Patterson said.

The cause of the fire has not yet been determined.

Tyre Crumb owners were not available for comment.

Up to three businesses that back onto the fire in an industrial warehouse were forced to evacuate on Monday morning including Tyre Crumb, but also, textiles recycling company Southern Cross Recycling. 

Southern Cross Recycling chief executive Enzo Bruscella said his staff noticed smoke coming from the stack of tyres shortly before 9am and notified authorities.

"Our major concern is for the health and well-being of our staff, so our staff have been evacuated and accounted for," he said.

He said business for the day has been shifted to another site to minimise loss and to cater for emergency services that have set-up in his company's yard.

"We have great confidence in emergency services," he said.

His company has CCTV cameras that face the tyre pile and is likely to be reviewed by authorities when they begin investigations into the cause.

Kerry Talbot works at a fruit supply shop across the road from the fire.

She said she could see flames and smoke from where she was standing, but smoke was travelling straight up in the air, rather than blanketing the ground.

"There's no smell ... It's so dead out there, there's no wind," she said.

"We're pretty close and we haven't been told to move or anything."

The MFB  has issued watch and act advice for the Broadmeadows, Campbellfield, Coolaroo, Dallas, Fawkner, Gladstone Park, Glenroy, Gowanbrae, Hadfield, Jacana, Lalor, Meadow Heights, Reservoir, Thomastown and Westmeadows areas.

It has warned of toxic smoke from the site and told residents to shelter indoors and make sure external windows, doors, vents are closed, including air conditioning and heating.

Maygar Boulevard and Park Street are partially closed.

The Environment Protection Authority has sent air monitoring equipment out to Broadmeadows at the request of the MFB.

The equipment will test for the presence of fine particles within the smoke that are tied to lung cancer risk.

Rubber tyres are twice as hard to set on fire as paper or wood, but can be a fire risk because they absorb heat, making flames are harder to extinguish once they are alight.

The MFB's open-air tyre storage guidelines also state that the shape of a tyre also makes it difficult to put out the flames, because the inside of the structure holds in air to feed the fire but at the same time the outer area provides a shield from hose spray.

The guidelines, which came into effect in March 2014, say tyres should not be stored in large piles no larger than 20 metres long, six metres wide and three metres high.

The Environment Protection Authority also updated its tyre storage requirements in April last year so that sites that housed more than 5000 tyres had to get a special license or face fines of up to $350,000.