UPDATE WEDNESDAY 7am:

A FIRE that broke out in a shop in Mary St last night started due to heat build up in a bundle of towels, Gympie fire station officer Cameron Nichol said.

Three crews attended the fire that was seen billowing smoke from the lower Mary St shop, attracting onlookers who were moved away from the scene by police.

A smoke alarm alerted a person in the building who escaped without injury.

"It appears to have started in some massage towels that were bundled together into a laundry bag," officer Nichol said.

He said the combination of wet towels and oil can build up to the point where the oil can ignite.

The fire caused minor damage to the building with firefighters remaining on the scene for some time, he said.

A Gympie police spokesman said the fire is not being treated as suspicious.

TUESDAY 9.15pm:

Emergency crews have rushed to Gympie's CBD tonight after a lower Mary St shop caught fire.

Fire crews were forced to extinguish the blaze when they arrived, which a Queensland Fire and Emergency Services spokeswoman said started in a shop laundry just after 8.20pm..

While the fire is out crews have remained on the scene to ventilate the building and monitor gas levels, with thick smoke still swirling in the main street.

Police have moved observers away from the building.

A Queensland Ambulance spokeswoman said no-one appeared to have been injured in the fire.