Five firefighters are among the dead in the incident which involved five explosions in the south-western city of Kaohsiung.
Reports said ruptured gas mains caused the disaster, but why that suddenly happened over such a large area has not been explained.
Images and footage from the scene show major fires and damage to roads and buildings.
“At least 212 people who were injured have been rushed to hospitals for treatment,” the National Fire Agency said.
“The local fire department received calls of gas leaks late on Thursday and then there was a series of blasts around midnight affecting an area of two to three sq km (one sq mile),” the fire agency added in a statement.
People have been ordered to stay home from school and work in Kaohsiung’s Lingya district, Taiwanese news agency CNA reported.
Chinese news agency Xinhua reported that before the explosion, smoke with a “gas-like smell” came out of drains.
Video from Taiwanese broadcaster ETTV showed a large fire burning the middle of a street, with smoke rising into the night sky.
A motorcycle and other debris were scattered across the middle of the roadway.
Mobile phone video captured the sound of a secondary explosion as flames leapt at least 30ft (9 metres) into the air.
The force of the initial blast also felled trees lining the street and flung vehicles into the air.