An engine fire on board a cruise ship operated by Carnival Corp left about 4,500 passengers and crew stranded in the US Virgin Islands for a second day on Tuesday and forced the cruise operator to cut the trip short.

The Carnival Liberty set sail from San Juan, Puerto Rico, on Sunday with 3,346 guests and 1,150 crew on board and was a day into a week-long Caribbean cruise when the fire broke out.

The fire was extinguished by the ship's automated suppression system, Carnival said. No guests or crew were injured.

Passengers and crew were told to evacuate onshore on Monday after thick black smoke was seen rising from the ship while it was docked in St. Thomas, a Reuters reporter on board the vessel said. Staff distributed water and snacks in the port.

Passengers were transferred to nearby hotels, where movies were screened and a buffet was served before they returned to spend the night on the ship. On Tuesday, every passenger was offered $150 credit to spend on board and free transportation into town.

Carnival said passengers will get a full refund as well as be offered a 50 per cent discount on a future cruise.

"I could feel worse but I still see it as a free cruise," said passenger Elaine Myers, a 21-year-old student from Kansas City, Missouri. "What is important is that nobody died or got hurt in the fire."

Carnival said a team of experts, including US Coast Guard representatives, had boarded to assess damage and that the ship would set sail for San Juan once it received clearance from authorities.

Guests can opt to leave the cruise or travel back to San Juan and explore the city till Sunday, the company said. If the ship is not cleared to leave St. Thomas by Tuesday evening, Carnival said it would fly all guests home.

The aborted cruise and related expenses might have a "small" financial impact, if any, on Carnival, company spokesman Roger Frizzell said.

Engine room fires have disrupted other cruises in recent years. In 2010, an engine fire crippled the Carnival Splendor's propulsion system and knocked out most of its power off the Pacific coast of Mexico.

In 2013, the Carnival Triumph was rendered out of service, leaving about 4,000 people adrift in the Gulf of Mexico without power or adequate sanitation.

Later that year, a fire aboard a Royal Caribbean Cruises ship forced it to dock at Freeport in the Bahamas. - Reuters