The fire started in the rear of a McGill's bus at around 6.30pm when it was parked at the bus terminal in Church Street.
A fault in the engine compartment is being blamed for the fire.
Two fire engines and police raced to the scene when the alarm was raised.
Eyewitnesses said flames shot out the rear of the bus and thick smoke also billowed out the back of the vehicle.
But the fire was quickly brought under control by emergency services.
Six passengers walked from the bus and there were no injuries.
Church Street was shut for several hours while the incident was ongoing.
Investigations are now underway to establish the cause.
A spokeswoman for McGill's said: "We can confirm that Fire Service Scotland attended to a fire which broke out on a bus on our 533 service whilst it was stationary at Port Glasgow bus station.
"The fire was confined to the engine bay and was quickly extinguished and the six passengers walked from the bus without injury.
"Investigations are now under way to establish the cause."
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