However, the driver noticed smoke coming out of the engine in the nick of time and stopped the bus, allowing 50-odd passengers to get down. Nobody was injured in the incident, police said.
The bus, belonging to Kaveri Travels, was en route to Anakapalle from Hyderabad. It had been hired by a family for attending a wedding.
Driver K Srinu noticed smoke coming out of the engine at the back of the bus in side-view mirror, and immediately stopped the vehicle.
By the time fire brigade team reached the spot, the bus was completely gutted.
Deputy Superintendent of Police A Purusotham said short-circuit could be the cause of fire, and probe was on.
The incident caused a traffic jam on the highway for about three hours.