The small arms ammunition that the Grandcamp had picked up in Belgium lay in wooden boxes in cargo hold 5, separated from the fire by a 5/16-inch barrier of steel. Workers evacuated from hold 4 were asked to begin moving the ammunition out of hold 5. They had successfully lifted only three out of sixteen boxes (which weighed about 150 pounds each) out of the hold by the time the Grandcamp's first mate ordered the men to exit the ship. With the knowledge that most of the ammunition remained aboard the ship, the day crew evacuated, fearing a potential explosion. The ship's captain decided to try to extinguish the fire by forcing steam into the cargo holds. He hoped this would put out the fire without damaging the cargo on the ship.

Instead, steam vapors probably liquefied the ammonium nitrate to produce nitrous oxide – an extremely volatile substance. It is also likely that the ammonium nitrate, which can itself produce the oxygen necessary to feed a fire, prevented the steam from dousing any flames. Steam also heated the internal compartments within holds 2 and 4, further escalating the core temperature of the vessel's cargo. The heat of the Grandcamp's cargo quickly approached 850 degrees Fahrenheit, the temperature at which ammonium nitrate will explode. Fuel oil, which lay in tanks between holds 3 and 4, may have ruptured the bulkhead and leaked onto the bags of ammonium nitrate, literally adding more fuel to the fire.