Network television footage showed black smoke billowing from the 4.7 km tunnel in Yamanashi prefecture, about 80 km west of Tokyo on the main road connecting the capital to western Japan.
Seven people were believed to be missing and two were injured, the fire service said. At least two cars were thought to be trapped.
Motorists described narrow escapes from falling debris, and a long walk through the darkness after abandoning their cars.
"When I was driving in the tunnel, concrete pieces fell down suddenly from the ceiling," a man in his 30s told public broadcaster NHK. "I saw a crushed car catching fire. I was frightened, left my car and walked for about an hour to get out of the tunnel."
The fire service said the blaze was extinguished about 11 a.m. - some three hours after the accident occurred. Rescue work was then suspended for fear of further collapses.
It was the worst such accident in Japan since 1996, when a tunnel collapsed and falling rocks crushed cars and a bus, killing 20 people.
NHK reporter Yoshio Goto, caught in Sunday's accident, hit the accelerator and managed to drive out.
"But it was a bit too late and pieces of ceiling fell on my car. I kept pressing the pedal and managed to get out," he said. "Then when I looked around, I saw half of the car ceiling was crushed."
One injured woman in her twenties told the fire service she had no idea what had happened to five others passengers from the car in which she was travelling.