Authorities evacuated about 100 people from their homes but no injuries were reported. The fire was contained after several hours.
Pearland is about 20 miles southeast of Houston.
Residents near Third Coast Packaging were awakened about 1 a.m. when their windows rattled from several explosions at the plant, which packages and labels chemicals and includes a tank farm for storage.
"It was chaos — fire trucks, officers, balls of fire and loud explosions," said Carlie Bankston, 21, who lives about three houses down from the plant. "It was very frightening."
"All of the product is petroleum based," said Houston Fire Department spokesman Jay Evans. "That's creating the tremendous smoke you see.
"There are numerous tanks that have caved in and ripped open. There's an extreme amount of damage out there."
There was no immediate cause for the fire, which covered about five acres of the 15-acre site in a rural area of Brazoria County about 20 miles southeast of Houston.
The blasts were heard up to five miles from the plant and flames were seen more than 10 miles away, witnesses said.
"We had flames 800 feet in the air at the plant," said Houston District Fire Chief Jack Williams. "At one point, about 15 tanks were on fire."
By midmorning, about eight hours after the fire erupted, the flames had subsided significantly and some of the black smoke had turned gray.
"It's died down quite a bit," Williams said. "The plan right now is to ... go in with a couple of foam lines and try to knock down the fire. I feel right now they've got a really good handle on it."
"The smoke's got everything covered up and we can't see," Pearland Fire Lt. Eddie Hanzick said.
"We're going to continue to put foam on it. This is a facility that has a lot of oil-based (material). Foam is required to put it out. Regular water would just spread the fire."
Williams said two warehouses and one nearby house were destroyed in the fire. People in the house were evacuated but firefighters were unable to get close enough to save the structure.
Firefighting efforts were hampered by a lack of hydrants at the site and water was being trucked to the site.
Preliminary testing of air quality showed no toxic chemicals in the smoke.
Residents were urged to stay inside their homes as state health officials began monitoring air quality in the area.
Dikes were also were set up to contain any runoff.
The area around the plant is primarily rural. People in the vicinity live on acreage and many of them have horses and other livestock.
A shelter was set up in Alvin, about 10 miles away, but only a handful of people had showed up.