Police and rescue workers raced to help injured passengers off the burning boat, near Koh Ka in Tambon Hat Sairee, in Muang District, Chumphon. The injured mostly suffered burns, reports the Bangkok Post.
Other passengers jumped into the sea.
There was an explosion on the ferry, operated by Lomprayah Co, around 2.30pm.
Police said the engine exploded. The fire spread from there, Thai media reported.
Phuripat Theerakulpisut, Deputy Director-General of the Marine Department, said later that the passenger ferry ‘Lomlakkhirin 18’ departed Lomprayah pier in Chumphon at 2pm with 18 passengers and two crew.
The explosion occurred near Koh Thong Lang, about three kilometres off the coast.
All passengers and crew were rescued. Some passengers were slightly injured. There were no deaths, said Mr Phuripat.
Early media reports said 18 passengers were injured.
An investigation into the cause of the fire was being launched.