Firefighters were called to the Forth Bay Nursing Home in Walker Street, Kincardine, at about 3.20pm today.
The fire appears to have quickly taken hold and spread.
However, police have said that all residents and staff have been accounted for.
Eye-witnesses spoke of flames shooting through the roof of the home.
A spokeswoman for the Scottish Fire and Rescue Service said: “A total of nine fire engines and two height appliances as well as a command support unit and fire investigation unit were immediately mobilised to the scene.
“Firefighters are presently working to bring the fire under control using powerful water jets.
“There are no confirmed casualties.”
Police have evacuated nearby homes and buildings, as well as closing off several roads surrounding the home.
An air ambulance attended as a precaution and the Red Cross has sent a support team.
Some of the elderly residents are understood to be in local pubs and the community centre until alternative arrangements can be made for them.
Forth Bay is run by Caring Homes Limited.
It has 53 single bedrooms and cares for elderly people, including those with dementia, and adults with physical disabilities.