Penn Station services are also disrupted after an Amtrak work train caught fire in the West Side Rail Yard.
There was a heavy emergency response at 10th Avenue and 31st Street, where a thick cloud of black smoke filled the street around 1:30 a.m.
Amtrak expects service to be suspended until noon.
The engine went up in flames, prompting firefighters to call a second alarm and run hoses into the yard to bring the fire under control.
Crews worked to fully extinguish the fire and determine how many tracks remain operational.
"Very heavy smoke condition, high heat, a lot of hazards down there, tripping hazards, electrical hazards, but out units, we're trained for this," Barvels said.
Commuters are urged to take alternate routes to avoid the area along 10th Avenue between 31st and 33rd streets.
Crews have been working at the scene and have been seen going in and out of a doorway across the street.
Beyond the doors spotted from the street is a stairwell that allows firefighters to access areas below ground.
"We had to go through an emergency exit to extinguish the fire, that was the closest option to us. It would have been a significantly difficult stretch of the hose line to go through actually Penn Station itself so we had to go through the emergency exit," FDNY Deputy Chief Michael Barvels said.
Authorities say five workers, believed to be railroad employees, were injured and treated for smoke inhalation.
Two of those injuries are considered serious, while three others refused medical attention.
The cause of the fire remains under investigation.
NJ Transit:
- Midtown Direct service is being diverted to Hoboken. NJ TRANSIT rail tickets and passes are being cross honored by NJ TRANSIT and private carrier bus and PATH at Newark Penn Station, Hoboken and 33rd Street, New York.