The gas leak was reported at 11:06 a.m. at a construction site at 2933 Alum Rock Ave. after a crew struck a two-inch main, San Jose fire Capt. Charles Rangel said.
There are several businesses nearby, as well as James Lick High School, where school is not in session this week. No injuries have been reported, Rangel said.
People in the area were advised to stay indoors until the leak was capped.
Rangel said shortly before noon that a PG&E crew was at the scene and that authorities had shut off power and all possible ignition sources near the leak.