Video shared on social media shows the topless man jump from what appears to be a stationary ice cream truck onto a moving Metropolitan Transportation Authority (MTA) bus on the B-26 route near Franklin and Putnam Avenues.
When on top of the bus, the man shoots the flamethrower, sending columns of fire swirling into the night sky as a crowd of onlookers cheers and films the incident on their phones.
He then blasts the flamethrower — which is not illegal in New York — at the ground before jumping off and walking away.
The incident took place at around 5.30pm on 8 November. The MTA said there were around two dozen passengers on board the bus; they were all evacuated and no injuries were reported.
"We don't even need to say how absurd, dangerous and just plain stupid this was," MTA communications director Tim Minton said in a statement.
"The reckless individual who torched over the top of an occupied city bus put New Yorkers, including the bus operator, in life-threatening peril.
"We are grateful for the courageous actions of the operator in moving riders to safety minimised risk, and are cooperating fully with the NYPD investigation."
The NYPD said it was aware of the video which is being investigated by its 79 Precinct Detective Squad.
Videos of the incident shared on social media are linked to rapper Dupree G.O.D, whom The Independent has contacted for comment.
Other clips posted online show the flamethrower being used in a schoolyard, although it was not immediately if the two incidents are related.
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