Lancashire Fire and Rescue Service sent six fire engines to the old Ivy Bank High School on Byron Street, Padiham.
Residents in the area were warned to keep their windows and doors shut, and keep out of the smoke plume.
Firefighters were called shortly before 2pm to the fire in a building consisting of four floors, approximately 30 metres by 30 metres.
No injuries have been reported.
Chris Rainford of the LFRS Drone posted pictures and commented: "Large fire at derelict Ivy Bank school in Padiham this PM.
"Swift intervention from LFRS restricted fire to top floor, remarkable effort given initial intensity."
The former Ivy Bank High School is being bulldozed to make way for a mixture of detached and semi-detached homes.
The owners of the site, Lancashire County Council, voted to sell the land to a developer two years ago.
Ivy Bank, which initially opened as a girls’ high school before becoming a mixed comprehensive in 1981, closed in 2006 after merging with Habergham High School to form Hameldon Community College.