Airline officials said a bird strike was the likely cause.
The pilot and passengers said they heard a loud noise and felt a rattle.
"At the time I remember thinking this is not good," passenger Nick Curtiss said.
As fear spread through the cabin, passengers said the pilot made an announcement.
"Told us that he thought we either hit a bird or either blew a tire and we were just going to circle around and make sure the landing gear was all right," passenger David Smith said.
Smith and Curtiss where both sitting near the plane's front left engine and said they saw the smoke.
"I started seeing fire come out of the engine," Curtiss said. "It was just like kind of fire."
"When you're 30 to 40,000 feet in the air and the engine is shaking and you see flames come from the engine it really humbles you," Smith said. "You know you get a sense of humility that comes over you."
Northwest Airlines said the pilot shut down the left engine and decided to return to Raleigh preparing the plane to make an emergency landing.
"There were a few loud people in the back, the woman next to me was saying prayers, and crying a little bit," Curtiss said.
The plane landed safely just after 9 a.m. and all 148 passengers and five crew members made it out without harm.
"I'm really blessed, I'm just glad God pulled it through for us," Smith said.
Passengers were re-accommodated on other flights.
Northwest Airlines also apologized to customers for any inconvenience.