Bruce Springsteen envisioned "Fire" as a song which could be recorded by his idol Elvis Presley, the song being written during the period after Springsteen had seen Presley live at a May 28, 1977 concert at the Spectrum in Philadelphia: Springsteen would allege "I sent Elvis a demo of it but he died August 16, 1977 before it arrived."
Springsteen did complete a studio recording of "Fire" which was one of 52 tracks at least partially recorded which did not make the cut for Springsteen's June 2, 1978 album release Darkness on the Edge of Town: these tracks were omitted on the grounds of inconsistency with Springsteen's ultimate thematic vision for that album. Springsteen's manager Jon Landau has speculated Springsteen had a special concern that, if included on Darkness on the Edge of Town, "Fire" would be Columbia Records' single of choice despite being non-representative of the overall album.
Springsteen's disinterest in showcasing "Fire" on Darkness on the Edge of Town reportedly did not preclude his being upset when The Pointer Sisters recorded a version of "Fire" which reached #2 in January 1979, easily besting all of Springsteen's own single releases to that point which had all had Top 20 shortfalls: Springsteen's first single release subsequent to the Pointer Sisters' success with "Fire" would be "Hungry Heart" (1980) a track heavily customized to have Top 40 appeal and would reach #5 becoming the first of Springsteen's twelve Top Ten hits to date.
Despite its omission from the Darkness on the Edge of Town album, "Fire" was included in the set list of Springsteen's Darkness Tour and has been a Springsteen concert staple ever since. On the 1986 Springsteen concert album Live/1975-85 "Fire" is represented by a December 16, 1978 performance at Winterland in San Francisco, the track being heavily edited to eliminate Springsteen's on-stage vocal hijinks. Issued as a single, this version of "Fire" reached #46 on the Billboard Hot 100 and also charted in Ireland (#18), the UK (#54), Australia (#82). The music video to promote the single was an acoustic performance of the song by Springsteen at a Bridge School Benefit concert in 1986.
The first released recording of "Fire" was by neo-rockabilly singer Robert Gordon who had met Bruce Springsteen through E Street Band bass player Gary Tallent with Gordon and Springsteen having subsequently been on friendly terms for some time before Springsteen gave Gordon the song "Fire" after seeing a live gig by Gordon and Link Wray: according to Gordon "it was a choice between 'Fire' and another new song but [Springsteen] decided to keep the other one for himself."  (Gordon had been on friendly terms wtihknown Springsteen played piano on Gordon's recording of "Fire" which was released on Gordon's 1978 album Fresh Fish Special, the tracks for which were recorded in December 1977 at Plaza Sound Studios (Manhattan).
The inaugural single by the Pointer Sisters as the trio of Anita, June and Ruth Pointer, "Fire" was recorded for the group's November 1978 album release Energy. The lead vocal on the track was by Anita Pointer: on hearing the song's demo, which featured a deep Elvis Presley-type vocal, Anita Pointer had told producer Richard Perry: "It's too low for me: I guess you want Ruthie to sing it" to which Perry replied: "No - I want you to sing it." Knight Ridder music critic Christine Arnold cited "Fire" as Energy 's main highlight opining: "Springsteen has created a song that might well have been done by the Ronettes in the '60s, and the Pointers inherit and develop the legacy nicely. Lyrically it's a simple song, but one that captures the indecision of a woman who wants and does not want a man all at the same time. And when the Pointers sing [the lyric] fire it's enough to sear your turntable." 
Rising as high as #2 on the Hot 100 in Billboard magazine in February 1979 (behind Rod Stewart's "Da Ya Think I'm Sexy?"), "Fire" would eventually be tied by "Slow Hand" (1981) as the Pointer Sister's highest-charting single. A hit on Billboard's Hot R&B/Hip-Hop Songs and Adult Contemporary charts at respectively #14 and #22, "Fire" would also afford the Pointer Sisters an international chart hit, reaching #1 in Belgium, the Netherlands, South Africa and New Zealand, and charting in Australia (#7), Austria (#10), Canada (#3), Germany (#35) and the UK (#34).
Anita Pointer would recall: "['Fire'] became [the Pointer Sisters'] first gold single: we had had gold albums before but I didn't realize what a difference a gold single made 'cause...that one song [is played] over and over all over the world. ['Fire'] really became a major hit for us and made a total difference in our career."
Shakin' Stevens had a January 1979 UK single release with "Fire" serving as B-Side to his remake of"Endless Sleep": in the Netherlands the single was issued with "Fire" as A-side and formatted with a picture sleeve, this Dutch pressing being now valued at £200+.  In 1984 the Henning Stærk Band (da) recorded the song for their album One Nite Stand, and the 1988 live album The Ahoy Concert by Anita Meyer included her version of "Fire".
Link Wray, rockabilly guitarist who played on the Robert Gordon version, released his own version on his 1997 live album Walkin' Down A Street Called Love. In 2001, contemporary jazz guitarist Chuck Loeb covered the song on his release In a Heartbeat.
Anna Calvi remade "Fire" in 2013: it serves as B-side for her December 23, 2013 single release "Suddenly".
The fictitious Austrian artist Kurt Ostbahn (played by musician Willi Resetarits) made a German cover of the song called "Feuer" (The word "fire" sounds similar in Viennese dialect) in the year 1985. Other non-English rendering of "Fire" include "Feigling" (German) by Ingrid Peters, "Le Feu" (French) by Michèle Richard (fr) and "Teesklus" (Estonian) by Rock Hotel (et).