The fire started shortly after 10:30 a.m. at an apartment complex located in the 300 block of Railroad Street.
Officials said two apartments were damaged by the fire, and two lower apartments are likely to have water damage.
"Within 20 minutes we had it under control, but it got into the attic, and fires that get into attics are always difficult to control," firefighter Tim Duffey said.
The Red Cross told ABC11 it is assisting five families, totaling 21 people, including 12 children.
A resident woke up to find smoke coming from a closet inside his apartment. He tried to extinguish the fire with water, but it had already begun to spread.
The Knightdale fire chief said one firefighter was overcome by the heat but will be okay.
No other injuries were reported.