Four of the six cars involved in the crash were carrying the chemical -- a highly toxic and flammable substance called vinyl chloride -- which leaked from at least one tank car into Mantua Creek, New Jersey emergency and environmental officials said. No serious injuries were reported, but 18 people with respiratory issues were sent to a hospital as a precaution, officials said.
Nearby schools placed students on lockdown, and authorities ordered evacuations in a very limited area around the accident.
At a news conference, a state environmental official indicated that much of the danger had passed, but he warned residents to stay alert for public safety announcements.
"It appears that all of the vinyl chloride that was in the particular car has dissipated," said Larry Hajna of the New Jersey Department of Environmental Protection. "There's no more release going on."
Booms have been placed in the creek as a precaution, he said, to contain about 180,000 pounds of chemicals that leaked.
The air surrounding the wreck is being monitored and is safe, the official said.
Video of the train wreck site from CNN affiliate WPVI showed two tanker cars dangling from the collapsed railroad bridge. Other cars were in the creek, partially sunken amid rising smoke.
Vinyl chloride is used to make plastic and vinyl products, including PVC pipes, according to the Environmental Protection Agency, which has labeled the chemical a Group A human carcinogen. "Short-term exposure to high levels of vinyl chloride in air has resulted in central nervous system effects, such as dizziness, drowsiness, and headaches," the EPA says on its website.
The remaining overturned railroad cars "are going to have to be righted," said Paulsboro spokesman John Burzichelli. "One car was compromised, but there are three others."
Mindful of the two cars dangling from the wrecked bridge, Burzichelli said that "there's probably going to be one car that's going to be a very delicate move."
"It's a time for caution," he said, warning residents to listen for announcements as the emergency is assessed.
Burzichelli described the bridge as "a very old structure" that underwent "a major rebuild" two years ago. Three "major trains" go across the bridge each day, he said.
A representative for Underwood Memorial Hospital told CNN that the hospital has treated 18 patients with respiratory issues -- mostly for sore throats.
A hazardous materials team is on the scene, said Glen Roemmich, Paulsboro-area emergency management coordinator.
Immediately after the wreck, residents told WPVI that they smelled an odor in the area. Authorities warned residents to stay indoors as a precaution and to keep windows closed.
The Coast Guard said it was sending crews to the scene begin cleanup efforts.
Also, a team from the National Transportation Safety Board, the nation's top transportation investigator, was on its way to the scene, the agency said.
Paulsboro is southwest of Camden, about a 20-minute drive from Philadelphia.