Dramatic photographs flooded social media as the incident unfolded around 1:45 p.m. on Monday.
A huge plume of black smoke could be seen rising across the skyline of the capital.
Ten fire engines and 100 firefighters were on hand to fight the blaze.
A man was being treated by the London Ambulance Service team.
Under the arches of the railroad tracks, three business units, four cars and a telephone booth caught fire in the incident, London firefighters confirmed.
The fire could be seen exploding on the side of the station, in a video taken by a passerby.
Among the witnesses, one wrote: “A lot of black smoke, then an explosion and a big ball of fire erupted.
“I am now engulfed in black smoke, so I cannot see anymore. “
Others added: “Jesus Christ, scenes of elephant and castle fire. #London. «
They tweeted: “Ten fire trucks and about 70 firefighters witness a fire on railway arches near # Elephant Castle station.
“Please avoid the area and close all doors and windows. “
They added: “Three business units under the railway arches are fully lit and four cars and a telephone booth are also lit near #ElephantandChâteau Station.
“Road closures are in place and people are advised to avoid the area and keep windows and doors closed. “
Ambulances also attended the scene.
An employee of a restaurant near Elephant and Castle station was evacuated after the fire.
Alex Leckie, 30, deputy manager of Tupi, said: “The whole building was evacuated, we started to smell smoke and the store owner went to check, we saw smoke coming out and this I was told was that the mechanics were on fire, the pillar of smoke also began to envelop the buildings and we continued to hear intermittent detonations.
“Police said it might take some time (until they are allowed to go inside). They have repeatedly pushed back the crowds even from the park of the Place du Chateau and sealed off the roads, there is a very, very heavy presence.
“At this point, the emergency teams have everyone well out of the area. “
“All lines through Elephant & Castle are currently blocked. Firefighters are assessing the situation, ”Thameslink tweeted.
It is not known if anyone was injured in the fire.
Network Rail added: “Trains are currently stopped, unable to continue in the Elephant and Castle area.
“Emergency services are on site and we are awaiting confirmation that the area is safe for the passage of trains. “
Southwark Playhouse has offered to accommodate anyone evacuated from the fire.
The local theater wrote on Twitter: “We are aware of the Elephant and Castle fire and we hope everyone is doing well.
“If you’ve been evacuated and need to go somewhere, our door is open so you can charge your phone, get water, or sit in our bar.
“We are at 77-85 Newington Causeway – two minutes from the station. “
The London Fire Department spokesman said: ‘The blaze is in the garages next to Elephant and Castle station rather than the station itself.
“The trains were stopped at the station.
“Ten fire trucks have been dispatched to date and 70 firefighters. There are four cars going down to the garages and a phone booth.
“Some cylinders are involved, but we don’t know at this stage what they contain. The teams will seek to remove the cylinders as they can explode under the effect of heat. They are trying to pull them out and shut them down.
“We will have more information as the situation evolves. “
The Metropolitan Police are aware of the incident.
The incident is believed to be unrelated to terrorism, police said.
A Met spokesperson told The Evening Standard: “Police were called around 1:47 pm in response to a fire on Elephant Road, SE17.
“Officers and the London ambulance service are supporting London firefighters at the scene. There are significant road closures in place and the public is advised to avoid the area.
“The station has been evacuated and residential evacuations are underway. At this early stage, the incident does not appear to be terrorism related. “
Network Rail station at Elephant and Castle has been closed due to the fire while some London Underground services remain open, according to a TfL spokesperson.
He said: “The north line does not stop at Elephant and Castle but the Bakerloo line operates as usual. The entrance to the north line has been closed but the entrance to the Bakerloo line is not affected and remains open.
“The staff are there to make sure people are in a safe place alongside the police. “