The fire department said 15 people were treated for minor injuries at the scene. Another person with serious injuries was transported to Harlem Hospital.
Residents heard a large explosion near Park Avenue and 116th Street in East Harlem at around 9am local time today. One five-storey building was reduced to rubble, and a second was also heavily damaged.
Pavements in a wide surrounding area are littered with broken glass from shattered windows.
Witnesses said the blast was so powerful it knocked food off the shelves of nearby shops.
The site is next to Metro-North commuter train tracks. Services have been halted to and from Grand Central Terminal.
The cause of the blast is unclear.
Police, some wearing gas masks, handed out medical masks to residents and onlookers because of the thick white smoke that shrouded the area.
Eoin Hayes, 26, said the explosion shook his entire apartment building in Harlem. He ran to the window and saw flames consuming one building and smoke rising into the air.
"I was in my bedroom and the explosion went off, it kind of shook the whole building," he said. "You could feel the vibrations going through the building."
The New York Police Department later said one person is believed to have died.
The fire department has about 170 personnel on the scene.