Police officer Aurelis Colon told the Associated Press the ship was safely docked in Puerto Rico by 9:45 a.m. Coast Guard officials said no injuries were reported.
Video shared on social media showed ferry passengers strapped in bright orange life jackets as they prepared to disembark. Smoke billowed from the ship.
Puerto Rico Police shared photos of the ship, American Cruise Ferries' Caribbean Fantasy, taken from a helicopter flying overhead.
The fire apparently started in the ship's engine room, the Puerto Rico Firefighters Corps. said.