The wildfire broke out in Poudre Canyon near the Hewlett Gulch Trail in Roosevelt National Forest on Monday just after 1 p.m.
Smoke from the fire is visible from Fort Collins.
Authorities say structures are near the fire, but none are in immediate danger.
The fire is 250 to 280 acres in size and is less than one mile from Poudre Park.
Approximately 40 firefighters from the U.S. Forest Service and Larimer County Emergency Services responded.
Authorities have called in a Single Engine Air Tanker to help fight the fire. A Type 3 incident team will be on scene on Tuesday and a Type 2 team will follow after them.
Three 20-person crews, a Type 1 helicopter and a heavy air tanker were also ordered to the fire.
The Hewlett Gulch Trail and the Greyrock Trail are both closed.
The cause of the fire is still unknown.
Residents from mile marker 110 to 115 a quarter mile north and south of Highway 14 should be prepared to evacuate if needed.
Greeley Water says the fire is near some of its water supplies and it will change operations if it becomes necessary.
The U.S. Forest Service is posting updates on the fire at http://inciweb.org/incident/2863/.