Smoke was visible for miles around the fire.
Police in Orange County said the fire started late Sunday morning.
150 firefighters from 14 different companies worked to subdue the beastly blaze.
Officials said the old mill was a series of connected buildings that house nearly two dozen small businesses.
"There were numerous buildings there and they just kept on catching on fire, one after the other, after the other, exploding, popping down," resident Elena Brodmerkel said.
"You're hearing brick walls pop right now down there. The flames are so intensified, you can hear the flames," resident Dan DeGroat said.
"There's nothing in there now, it was the old packing that did the candy factory. They had to move. That whole section was all ruined by the flood [from Tropical Storm Irene]. So they were all in the midst of cleaning all that section out," business owner Bill Diamond explained.
There are were no deaths or serious injuries.
Cornwall is a community of about 12,000 that dates back to the 1700s mill, about 50 miles north of New York by the Hudson River.
Orange County Fire Investigators will investigate the cause of the fire on Monday morning.
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