Police said the gunman was believed to have acted alone and immediately fled the crime scene.
The attack unfolded as a Manhattan-bound subway train on the N line was pulling into an underground station in Brooklyn's Sunset Park neighbourhood.
Ten people were hit directly by gunfire, with five of those hospitalised in critical but stable condition, authorities said.
Police said 13 more people suffered from smoke inhalation or were otherwise injured in the chaos as panicked riders fled the smoke-filled subway car.
Some collapsed to the pavement as they poured onto the platform of the 36th Street station. The fire department said two of those hurt were treated at the scene.
All of the victims were expected to survive their injuries, police said.
New York Police Department Commissioner Keechant Sewell said a hired U-Haul van believed to be connected to the shooting was later located in Brooklyn, but the perpetrator remained at large several hours after the incident.
At an early evening news briefing, police named a "person of interest" in the investigation as Frank James, who investigators said had rented the U-Haul vehicle.
Police said they recovered the key to the van at the crime scene and it had been rented in Philadelphia. James had addresses in Philadelphia and Wisconsin, officials said.
The subway assailant was described by police from eyewitness accounts as a man of heavy build, wearing an orange vest, a grey sweatshirt, a green helmet and surgical mask.
The commissioner said the attack began in the train car as it was about to enter the station. The gunman removed two canisters from his bag and opened them, sending smoke throughout the train car.
Police said the man then fired 33 rounds from a Glock 9mm semi-automatic handgun, which was later recovered along with three extended ammunition magazines, a hatchet, some consumer-grade fireworks and a container of petrol.
Sewell said earlier the shooting was not being immediately treated as an act of terrorism.
There was no known motive for the attack, but investigators found a number of social media posts linked to an individual named Frank James that mentioned homelessness and the New York City mayor, Sewell said.
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