Large-scale fires mainly due to the ignition of thermal insulation materials in the ceiling of piloti-type structures are becoming frequent. However, the fire spread in these cases is not well understood. Herein we performed small-scale and real-scale model tests, and numerical simulations using a fire dynamics simulator (FDS). The experimental and FDS results were compared to elucidate fire spread and effects of thermal insulation materials on it. Comparison of real-scale fire test and FDS results revealed that extruded polystyrene (XPS) thermal insulation material generated additional ignition sources above the ceiling materials upon melting and propagated and sustained the fire. Deformation of these materials during fire test generated gaps, and combustible gases leaked out to cause fire spread. When the ceiling materials collapsed, air flew in through the gaps, leading to flashover that rapidly increased fire intensity and degree of spread. Although the variations of temperatures in real-scale fire test and FDS analysis were approximately similar, melting of XPS and generation of ignition sources could not be reproduced using FDS. Thus, artificial settings that increase the size and intensity of ignition sources at the appropriate moment in FDS were needed to achieve results comparable to those recorded by heat detectors in real-scale fire tests.