Images on social media show a plume of smoke rising near the building of the US embassy in the exclusion zone of Kabul where several other embassies are also located, Xinhua news agency reported.
The blast was caused by a rocket attack, a local reporter said.
An alarm was sounded by the US embassy after the explosion and it could be heard in surrounding areas.
There is no official report of any casualty yet but some casualties are feared.
No government official could be reached for more details and no one has claimed responsibility for the blast.
This is the first major attack in the Afghan capital since US President Donald Trump abruptly called off US-Taliban peace talks to end America's longest war lasting almost 20 years.
Last week, two car bombs killed several people, including two members of an international NATO mission.
Trump said those attacks, in which one American soldier also died, were the reason he calls the US-Taliban talks "dead".
Following Trump's comments, the Taliban pledged to continue fighting against US forces.
In a statement to Al Jazeera, Taliban spokesman Zabihullah Mujahid said Washington would regret turning its back on talks spearheaded by high-level officials from both sides.
"We had two ways to end the occupation in Afghanistan. One was jihad and fighting, the other was talks and negotiations," Mujahid said.
"If Trump wants to stop talks, we will take the first way and they will soon regret it," he said.
September 11 marks the 18th anniversary of the attacks by al-Qaeda on the World Trade Center in New York in 2001. The US invaded Afghanistan in late 2001 in response to the attacks.
( With inputs from IANS )