Deputies and firefighters responded to the scene, Entertainment Fireworks in the 13000 block of Reeder Road Southwest, at about 9:55 a.m. after receiving a report of an explosion and fire in the building.
Three injured victims were found at the scene.
The most seriously injured of them, a 74-year-old man, died before he could be airlifted to Harborview Medical Center in Seattle.
A 25-year-old man was airlifted to Harborview with burns and trauma, Elwin said. A younger man was taken by private vehicle to Providence St. Peter Hospital in Olympia, said Lt. Greg Elwin of the Thurston County Sheriff's Office.
All three victims are employees at the facility, Elwin said.
A fire sparked by the explosion was quickly extinguished when fire crews arrived.
Mark Rorvic, 54, who lives across the street, told The Olympian that he awoke to the sound of the explosions.
"All of a sudden, all hell broke loose, and it was boom, boom, boom, boom," he said. "Horrific - it's the only way I could say it."
Rorvic said he used to work for the fireworks company, which puts on professional shows.
On its website, Entertainment Fireworks says it's the largest fireworks company based in Washington state. It puts on fireworks displays and distributes fireworks. The website says it has 21 buildings on its property.
The incident is under investigation by the Thurston County Sheriff's Office, the state Department of Labor and Industries and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Thurston County sheriff says there is no indication of criminal activity behind the explosion.