paper shop; paper merchant; papermaker
Refers to a shop that sells paper or a person/company that makes paper. The context usually makes the meaning clear.
祖父は町で小さな紙屋を営んでいた。
My grandfather ran a small paper shop in town.
この和紙は京都の紙屋から取り寄せたものです。
This Japanese paper was ordered from a paper merchant in Kyoto.
Compound of 紙 (kami, 'paper') and 屋 (ya, 'shop' or 'dealer').