Ed Gaugh, emergency management director for Fayette County, said a 34-year-old male employee died in the blast and subsequent fire at the Kinematics Research plant, which makes shells for pistols and rifles. The worker's name was not immediately released.
Oakland Police Chief Rick Jewell said at one point a large front door of the building blew off and a white fireball came out.
"It was scary; we just got out of the way," he said.
"It was a pretty horrific explosion. Rounds were going off for one solid hour. It sounded like continuous machine gun fire."
Jewell said the plant housed several thousand rounds and gunpowder. Witnesses said debris shot into the air during several explosions spanning a half-hour.
Fire crews could not get close to the building because of the danger. One firefighter was slightly injured, apparently hit by a bullet or fragment of some kind.
The fire was brought under control about 90 minutes after the first blast was reported around 1:45 p.m. The cause is not yet known.
The company, which has been in business since 1992, makes new and remanufactured ammunition for pistols and rifles. The company's phone line was busy Wednesday afternoon.
WMC-TV in Memphis reported authorities asked its news helicopter to fly away from directly above the scene.
The plant is located in a collection of industrial buildings, including a car body shop and a concrete company. They were evacuated after the explosion. No homes are located nearby.
Oakland, a town of 3,200, is about 30 miles northeast of Memphis.