The explosion blew out all windows in a three-block radius, levelling a strip club and leaving up to dozen buildings beyond repair.
Emergency workers also evacuated a six-storey apartment building that was buckling.
Officials at two nearby hospitals said 16 victims were transported with injuries, but none was critical.
Firefighters were investigating a gas leak when the blast happened shortly after 5pm.
The cause of the explosion in the Massachusetts town had not been identified.
Resident Wayne Davis said he felt his apartment building shake a block away.
The Navy veteran said the boom was louder than anything he'd ever heard, including the sound of a jet landing on an aircraft carrier.
- AP