No one was injured on the flight, which was traveling from New York's John F. Kennedy International Airport to San Francisco, and the plane was not damaged. JetBlue said the plane was carrying 158 people and 37,300 pounds of fuel when it landed.
The lithium battery began to smolder inside a passenger's backpack, according to an incident report.
A passenger on the plane, 18-year-old Kailey Honniball, said that about two and a half hours into the flight she heard a message over the PA system: "Sounds like fire in 25!"
She looked back and saw smoke.
"I was really scared," Honniball said. "When you see a fire on the plane and you're in the air, there's nothing you can do."
Flight attendants grabbed the backpack, put it in a rear aircraft lavatory and closed the door, the incident report states. This apparently stopped the battery from overheating.
The backpack had two burned holes and one of the lithium batteries was charred, according to the incident report. Firefighters met the plane at the gate and took the charred backpack and battery off the flight.
About three hours later, the aircraft was back in the air and on its way to San Francisco.
"(The crew) handled it pretty professionally," Honniball said. "They kept calm."
Grand Rapids Ford Airport spokeswoman Tara Hernandez confirmed that a lithium battery started smoldering, but said it was not a laptop battery. There was a laptop in the bag with it, she said.
There is no sign that the fire was intentionally started. An airport investigation with multiple parties is underway.
Last year, Samsung's Galaxy Note 7 phones were banned from all flights
after the company discovered that its lithium-ion batteries were faulty and could overheat and catch fire.
Spurred by fears of terrorism, the US government in March banned laptops in the passenger cabin
on international flights from airports across the Middle East and North Africa. Homeland Security Secretary John Kelly has said the ban might expand
to all international flights entering or leaving the US.