The man, who was wearing an orange construction workers' vest and green helmet, used a smoke device and opened fire in a Manhattan-bound carriage as it approached the 36th Street Station in the Sunset Park area.
On Tuesday evening, New York Police Department commissioner Keechant Sewell offered a $50,000 reward for information on a "person of interest" named Frank James, who has addresses in Philadelphia and Wisconsin.
Mr James had made social media posts with references to homelessness, and to New York Mayor Eric Adams, Ms Sewell said. There was also "concerning" language.
The NYPD said it found a bag with a jammed nine-millimetre Glock pistol, a hatchet, a gas mask, gas canisters and fireworks.
A key to a U-Haul moving van rented by Mr James in Philadelphia was also found at the scene.
Police found the van a couple miles away from the scene.
The shooting took place about 8.30am on the Manhattan bound N-train.
"An individual on that train donned what appeared to be a gas mask," Ms Sewell said on Tuesday morning.
"He then took a canister out of his bag and opened it. The train at that time began to fill with smoke. He then opened fire, striking multiple people on the subway and in the platform."
She initially said that 10 commuters were shot, leaving five of them in a "critical but stable" condition. That number is expected to rise.
The incident did not appear to be an act of terrorism, Ms Sewell said.
"We do not know the motive at the moment but we're not ruling anything out," she said.
Photos and footage from the scene posted on social media showed panicked commuters leaving a smoke-filled subway carriage and bloodied passengers lying on the platform floor.
Authorities initially responded to reports of smoke at about 8.30am at the 36th Street station in the Sunset Park area, which serves the D, N and R lines.
Once inside, emergency workers found people shot amid chaotic scenes at the station, a fire department representative said.
Ms Sewell said there were "no known explosive devices on subway trains".
The suspect, a short, stocky black man, was still at large, she said.
The NYPD urged people to stay away from the multicultural Sunset Park area, which is known for its bustling Chinatown and a warehouse district that houses many creative businesses.
US President Joe Biden was briefed on the subway shooting, the White House said.
"Jill and I are praying for those are injured and all those touched by that trauma," Mr Biden said at an event in Iowa.
"We're grateful for all the first responders who jumped into action, including civilians, civilians who didn't hesitate to help their fellow passengers."
Administration officials are also in touch with Mr Adams, who is recovering from a Covid-19 infection, and city police chiefs.
“We will not allow New Yorkers to be terrorised, even by a single individual,” Mr Adams said in a taped video message from the mayor’s residence, where he was isolating.
The newly elected mayor told CNN that the shootings were a “senseless act of violence” and pledged to double the number of police officers patrolling the city’s sprawling transport system.
New York Governor Kathy Hochul called the attacker "cold-hearted and depraved".
"This individual is still on the loose, this person is dangerous. We're asking individuals to be very vigilant and alert," Ms Hochul said.
The NYPD has urged witnesses to contact its hotline with any tips.
Trains coming to and from the station were delayed during the morning rush hour.
Shootings in New York City have risen this year, and the increase in violent gun crime has been a central focus for Mr Adams since he took office in January.
Last month, two men were shot by a man who was travelling between Washington DC and New York to shoot homeless people. One of the victims died.
This year, Mr Adams vowed to direct more police officers to transport stations to curb the rise in crime on the subway. The plan has been in effect since February.
For the period until April 3, shooting incidents rose to 296 from 260 compared with the same period last year, police data shows.
"We are sick and tired of reading headlines about crime, whether they're mass shootings or the loss of a teenage girl. It has to stop," Ms Hochul said.
"I'm committing the full resources of our state to fight this surge of crime."
The 36th Street station was serving about 13,342 passengers on weekdays in 2019 before the pandemic. In 2020, it served about 6,000.
Agencies contributed to this report.