The probable cause of the flames and smoke was a phone charger.
"Someone's battery charger just caught fire next to me on the Tube at Tower Hill", one person tweeted. The train was inbound from east London to Ealing Broadway.
Authorities said they were called after a fire alert at around 12.30pm this lunchtime.
Passengers heading into London fled in panic after the blast as the train was about to depart Parsons Green Station in West London at 8:20am.
The British Transport Police confirmed the incident was not being treated as suspicious, with the London Fire Brigade affirming this on Twitter.
Service is now suspended between Aldgate and Edgware Road on the Circle line, and between Aldgate East and Earl's Court on the District line.
On Monday, witnesses reported a "small-scale explosion" in a bag, triggering "panic and stampede" at Tower Hill station on the London Underground.
The station is closed whilst officers and @LondonFire respond.