The fire started around 2 p.m. at the Combined Tactical Systems Inc. plant in Jamestown, about 75 miles northwest of Pittsburgh near the Ohio border, said James Brown, a spokesman for the Jamestown Volunteer Fire Department.
The fire created a cloud, possibly of tear gas, that wafted over the plant. People within two miles were temporarily evacuated, Brown said.
Employees were taking a break when the fire broke out and no one was injured, said company spokeswoman Sally Cyphert.
The fire was contained in the storage building and is being investigated by the state police as well as Mercer County Emergency Management Agency and state environmental officials.
The company makes non-lethal munitions, including smoke and tear gas grenades, grenade launchers and rubber bullets, according to its Web site.