The fire was reported just after 10:20am on Monday. The blaze erupted on the 10th floor of the 49-story tower that will eventually be home to the Hotel Riu Manhattan Plaza Times Square.
According to a spokesperson for the New York Fire Department said that 78 firefighters have responded to the blaze.
An FDNY spokesperson confirmed that the seven people who were injured in the fire were all civilians. Five of the injured required hospitalisation, and two others were treated at the scene by paramedics.
Photos of the building - just steps away from Times Square - showed smoke rising in pillars from the high-rise and spreading out as it lifted into the Manhattan skyline.
The cause of the fire is still under investigation.
Another fire broke out in the city last week, killing a woman's son and her sister. Neighbors tried to save her family, but were unsuccessful.
The surviving resident, Ana Pagan, returned to the house with her other son and grandson to remove what few items survived the blaze.
Ms Pagan's son said his brother died in the fire saving his mother, according to The New York Daily News.
She said that the fire detector in their home did not go off, and she only became aware of the fire when she began to see the smoke.
Ms Pagan said her neighbors heard the family's cries and tried to break down the door to get to them.
“We’re trying to bang in the door to get in, because we just hear her screaming,” Jeane Flood, who lives upstairs, told the outlet. “But we couldn’t get into the apartment, because their doors are so strong.”
Ms Pagan eventually managed to escape the house, but her son and sister were later recovered from the building by EMS workers, but were unresponsive.
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