Firefighters arrived at the scene near The Crown public house on the A5 in Brownhills at about 12.30pm to find the National Express West Midlands service well alight.
No-one was hurt when the engine caught fire outside homes near the Rising Sun Island and Wilkin Road.
Photos from a witness show flames leaping out of the back of the bus as well as thick black smoke drifting above the carriageway.
In a statement National Express West Midlands said: “At around midday today, a National Express bus caught fire on Watling Street, Brownhills.
“Nobody was hurt and all passengers were swiftly evacuated from the vehicle by our driver.
“West Midlands Fire Service attended the scene and we will be carrying out a full investigation into the cause of this fire. We’d like to apologise to our customers for any inconvenience.”
Crew Commander Carl Hilton, of Aldridge Fire Station, said: “When the crew got there the passengers had left the scene. The whole of the bus was destroyed.”
Brownhills policing team posted: “Officers have been in attendance working in partnership with @nationalexpress@HighwaysWMIDS@WestMidsFire at Watling street this afternoon dealing with an incident that resulted from an electrical fault with a bus engine. Nobody hurt and all dealt with smoothly. Road open.”