Twelve properties were evacuated when Proofings Mill in Littleborough, Rochdale, caught fire, said Greater Manchester Fire and Rescue (GMFRS).
Crews were called to the mill in Hare Hill Road at 16:30 GMT on Saturday and spent all night tackling the flames, which are not fully extinguished.
David Roach from GMFRS said crews were “struggling to reach” pockets of fire.
Due to the instability of the building, we are unable to enter and are fighting the fire from outside of the mill,” he said.
He advised people to avoid the area and keep windows and doors shut because “the incident is still ongoing” and “there is still light smoke coming from the fire”.
Residents have now been let back into their homes.
Crews are likely to be at the scene for most of the day.