The Italian coast guard said the blaze was quickly extinguished and the passengers are safe.
Coast guard officials said that motors weren't working on the Italian cruise ship, Costa Allegra, and that crews have been sent to help.
The ship owner Costa Crociere said 636 passengers were on board the ship, as well as 413 crew members.
The accident aboard the Costa Allegra occurred about six weeks after the Concordia, another Italian cruise ship owned by the same company, capsized off Italy, killing 25 people and leaving seven missing and presumed dead.
The Associated Press contributed to this story.