It is unclear what caused the blast at around 0700 (0300 GMT) in the al-Quoz Industrial Area, which is home to hundreds of businesses and factories.
Television footage showed a fireball shooting 100m into the sky, followed by a huge plume of smoke and ash.
Around a dozen fire engines and ambulances have been sent to the scene.
All routes towards the area have been closed off, causing a major traffic jam along Sheikh Zayed Road, which links Dubai with Abu Dhabi, the capital of the United Arab Emirates.
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