Surveillance cameras captured a Bangladeshi man with a homemade bomb strapped to his body walking casually through a crowded passageway at the Port Authority Bus Terminal near Times Square in New York.
The crude pipe bomb suddenly went off at 7:20am local time, with a plume of white smoke clearing to show the man sprawled on the ground and commuters fleeing in terror.
Investigators said it was not clear if the bomb was set off intentionally or went off prematurely.
The suspect, who was identified as 27-year-old Akayed Ullah, was being treated at a hospital for burns to his hands and abdomen. He is believed to have acted alone.
Three other people, including a police officer, suffered minor injuries.
Law enforcement officials said Ullah was inspired by the Islamic State group, but did not have any direct contact with the terror organisation.
Ullah is from the Bangladeshi city of Chittagong and is a US resident, the country's police chief said.
He had no criminal record there and last visited Bangladesh on September 8