Six fire engines arrived at the scene in Starrgate Drive in Larches estate after the fire was reported at 2.20pm.
The fire is believed to have begun in a derelict row of shops with empty flats above them.
Thick smoke is leading to low visibility in the area, and motorists are being urged to avoid the area.
"We were called just before 2.20pm and we have six fire engines at the scene.
"Crews from Penwortham, Preston, Fulwood, Bamber Bridge and Leyland, and an aerial ladder platform are in attendance.
"Firefighters used six breathing apparatus, two hose reels, one jet and a ventilation unit to extinguish the fire.
"No injuries were reported."
Witnesses reported seeing fire crews entering the middle window of a first-floor flat via a ladder.
North West Ambulance Service attended the scene after reports of a possible casualty inside the burning building.
An NWAS spokesman said: "We were called to the scene at 2.23pm and responded with an ambulance, a rapid response unit and an advanced paramedic.
"The rapid response unit remains at the scene, but the ambulance and advanced paramedic has been stood down.
"No-one has been taken to hospital and it doesn't look like anyone has been seriously injured."
Residents said a squatter had reportedly taken up residence in one of the derelict flats.
Preston City Council, who own the property, has been contacted for comment.