More than 100 firefighters responded to the blaze on 46th Street by 28th Avenue just after 2 p.m.
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Officials with the FDNY said the fire started in the vestibule and traveled upstairs where a father and his five children lived.
Investigators believe an e-bike was charging inside the vestibule by the front door. An extension cord was running all the way to the family's apartment upstairs. When the battery blew, so too did the family's escape route.
Three of the children jumped out the window and two are deceased, including a 7-year-old boy and 19-year-old girl.
Another victim was injured in the fire but was expected to survive.
Neighbors said they rushed to the aid of the family trapped inside.
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One man said he caught three kids and their father as they jumped out of the burning home to safety.
"I heard someone screaming 'my house, my house, help help,'" Theodore Alafogiannis said. "Two of my neighbors were already outside. They said there's two kids and a man in the back we gotta get them out. So we cornered them as they jumped out the house."
This is the 59th fire this year caused by a lithium-ion battery. So far this year, five people have died in fires caused by lithium-ion batteries.
"The horrific fire that resulted in the death of two young people Monday afternoon is a stark reminder of the importance of an issue the FDNY has been talking about for some time: education and awareness around lithium-ion batteries," said Fire Commissioner Laura Kavanagh. "We know people have e-bikes and similar micro-mobility devices, and we are imploring users to follow all manufacturer safety guidelines and recommendations. We are also calling on our federal, state and local partners to move quickly on regulations that will help ensure tragedies like today's fire are prevented. We are heartbroken for the family of these victims."
FDNY officials believe the family was using an aftermarket charger for the device.
"We want people to purchase chargers that are compatible with the devices that they purchase," FDNY Chief Fire Marshall Dan Flynn said. "Do not buy the cheapest option."