The city of Lynchburg on its website posted that the fire department was on the scene Wednesday afternoon and urged motorists and pedestrians to avoid the area.
No injuries were immediately reported.
Photos and video show several black tanker-like train cars derailed and extensive flames and smoke.
A phone message left by The Associated Press with the Lynchburg Police Department wasn't immediately returned.
Lynchburg is a city of about 77,000 people in the foothills of Blue Ridge Mountains. It is home to Liberty University and several others and is located about halfway between Baltimore and Charlotte, N.C.
© 2018 Cox Media Group.