A 787 operated by All Nippon Airways (ANA) was about 30 minutes into a flight this morning when the pilots noticed a warning light had detected smoke in the forward compartment.
They also detected a strange smell in the cockpit of the 787, a plane many see as the future of commercial aviation.
The plane was immediately diverted to another airport and made an emergency landing.
Emergency chutes were deployed and the 129 passengers and eight crew evacuated safely.
Japan's transport ministry considers the emergency landing a major incident that could have led to an accident.
It is the latest in a series of problems to hit the Dreamliner fleet in the past week.
The sophisticated plane, the world's first mainly carbon-composite airliner, has suffered fuel leaks, a battery fire, wiring problem, brake computer glitch and cracked cockpit window in recent days.
ANA says it has grounded its 17 Dreamliners for emergency inspections.
"We are confident the current issues will be resolved before Jetstar receives its first aircraft as scheduled in the second half of this year."
Last year, Qantas cancelled orders for 35 787s in an effort to reduce costs, but maintained an option to buy up to 50 of the planes from 2016.
The 787 represented a leap in the way planes are designed and built, but the project was plagued by cost overruns and years of delays.
Some have suggested Boeing's rush to get planes built after those delays resulted in the recent problems, a charge the company strenuously denies.
The US Federal Aviation Administration (FAA) said it was monitoring the latest incident and would include the incident in the safety review of the 787 it launched on Friday.
India's aviation regulator said it would conduct a safety review of the Dreamliner.