The three men -- a member of the Air Force, an inactive National Guard member and a civilian -- responded quickly, possibly preventing a deadly attack on the high-speed Thalys train.
The suspect had a box cutter or some other bladed weapon, authorities said.
"My friend Alek (Skarlatos) yells, 'Get him,' so my friend Spencer (Stone) immediately gets up to charge the guy, followed by Alek, then myself," Anthony Sadler said in an interview with CNN.
"The three of us beat up the guy," Anthony said. "In the process Spencer gets slashed multiple times by the box cutter, and Alek takes the AK away.
"I begin to tie him up with help from Chris, another passenger. I notice a man had his throat cut at which Spencer begins to apply pressure to the neck wound before he bled out."
Spencer was cut in the head and neck and almost had his thumb cut off, Alek's brother, Peter Skarlatos told CNN. Alek had taken control of the rifle and hit the suspect in the head with the muzzle, the brother said.
The train was rerouted to the French town of Arras, about 115 miles (185 kilometers) north of Paris. The man was placed under arrest.
The suspected gunman, a Moroccan national, was on the radar screen of European counterterrorism agencies for his radical jihadist views, the European counterterrorism official said.
A second security source told CNN the gunman was known by French intelligence. The official said it appeared the gunman was sympathetic to ISIS, but a full determination on his specific loyalties had yet to be reached.
The man had plenty of ammunition, the first official said, and the Americans prevented a massacre.
The attack occurred while the train was on Belgian soil and Belgium Prime Minister Charles Michel tweeted, "I condemn the terrorist attack on the Thalys and offer my sympathy to the victims."
The train attack has not officially been classified as an act of terrorism, although the senior European counterterrorism official indicated it was suspected.
Calling the attack "an attack of barbaric violence," French Interior Minister Bernard Cazeneuve said the anti-terrorism prosecutor's office in Paris will investigate.
He expressed "gratitude and admiration" for the U.S. military service members' help.
Michel and French President Francois Hollande have agreed to unite their efforts and cooperate, French officials said.
Two people were hospitalized with serious injuries but their lives are not in danger, said Anthony Blondeau, spokesman for the city of Arras. He said one of them was an American.
The third person injured was French actor Jean-Hugues Anglade, who has a light hand injury, Blondeau said.
A White House official said Friday night: "Echoing the statements of French authorities, the President expressed his profound gratitude for the courage and quick thinking of several passengers, including U.S. service members, who selflessly subdued the attacker.
"While the investigation into the attack is in its early stages, it is clear that their heroic actions may have prevented a far worse tragedy. We will remain in close contact with French authorities as the investigation proceeds."
A Pentagon spokesman told CNN: "We are aware of the reports and at this point, can only confirm that one U.S. military member was injured in the incident, the injury is non life-threatening. We will continue to monitor the situation and provide updates as they become available."
Thalys tweeted Friday night that "The first passengers of Thalys 9364 are arriving in Paris-North; they are currently taken care of."
Thalys is the high-speed red train which travels from Paris to Brussels in 1 hour 22 minutes, to Cologne, Germany, in 3 hours 14 minutes and Amsterdam in only 3 hours and 16 minutes.
Christophe Piednoel, spokesman from the French railway company SNCF, said the suspect carried an automatic weapon and a bladed weapon.
The train was heading to Paris when the attack occurred. France has been the site of several lone-wolf terror attacks this year, including the killing of 17 people in Paris in attacks on a satiric magazine and a kosher store.