Cathay Pacific flight CX170 was en route from the western Australian city of Perth when it was diverted to the Indonesian resort island.
"The engine was shut down and emergency landing was declared," Cathay said in a statement, adding that the aircraft landed safely in Denpasar.
"There was no fire onboard. All passengers and crew are safe and unharmed."
Passenger Joel Sirna told an Australian radio station that there was a bang.
"Mid-flight, we heard a loud bang and the plane started to shake, all the lights went out and I looked to the window and have just seen some flames and some sparks -- the wing and the motor was on fire," he told 6PR radio.
"There were a few people that were pretty shaken. The girl next to me started freaking out and crying."
Cathay Pacific said it was investigating the incident, which involved an Airbus A330 aircraft.
Sherly Yunita, a spokeswoman for Bali airport operator Angkasa Pura, confirmed the flight made an emergency landing on the island at 3:35 am (1935 GMT Thursday) due to a "technical problem".
"No other flights were disrupted because the plane made a perfect landing, with no issues. No passengers were injured or taken to hospital," she said, adding the aircraft remained at Bali airport Friday where it was being repaired.
Engine Defect Prompts Cathay Flight to Divert to Bali
25 September 2015
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A plane carrying 251 passengers from Australia to Hong Kong made an emergency landing in Bali on Friday, with one passenger reporting seeing an engine on fire.
