Some residents reported hearing the boom in Cressage, between Much Wenlock and Shrewsbury, as far as five miles away, while others nearby said it shook their homes.
About 30 firefighters were joined by the ambulance service and police officers following the incident down Severn Way at about 11am today.
A fire broke out at the property before a ball of flames erupted into the sky.
Watch the explosion in this tweet from @misterduncan_uk
Residents were instructed to stay inside and keep their windows closed following the incident, which caused students and staff at the nearby Christ Church Primary School to be evacuated.
The fire service reported it involved a caravan and Liquefied Petroleum Gas (LPG) cylinders, and added that the blaze spread to nearby houses.
At least one property was completely destroyed and neighbouring homes were damaged, although no one was injured.
One resident, who wished to remain anonymous, said: "There was a big black mushroom cloud from the explosion.
"You could hear it from where I live about five miles away and a friend of mine said his whole conservatory rattled.
"The side of the house and the fence was completely blown away and there's loads of rubble everywhere.
"The elderly woman who lives there spotted a fire beforehand and was able to get out of the house before the explosion."
A Sheinton Road resident said: "I was out in the garden, where we've spent most of our lockdown, when I heard an almighty bang.
"We thought it was a car or something but you could smell burning in the air.
"I looked up and could see the smoke and that's when we knew there was a fire so we went inside to avoid it all."
Emergency service workers remained on scene throughout the day.
Shropshire Fire & Rescue Service sent six engines including the water carrier, which could be seen lining a 100m stretch of Severn Way throughout the day.
Crews were sent from Bridgnorth, Much Wenlock, Shrewsbury, Telford Central, Tweedale and Wellington fire stations. Operations, fire investigation and safety officers were also in attendance.
Firefighters also attended the nearby Christ Church Primary School, which backs onto where the explosion occurred, to search for rubble and ensure the area was safe.
Breathing apparatus and a hosereel jet was used to extinguish the remainder of the fire and further inspections were carried out later in the day to ensure it would not re-ignite.
West Mercia Police closed the road for a short period to allow greater access to the fire service.