Rescue authorities said police and soldiers had been drafted in to help firefighters after the midnight explosion and blaze gutted a district in the port city of Kaohsiung packed with shops and apartment buildings.
Four firefighters were among the dead and President Ma Ying-jeou pledged tough measures to prevent any recurrence of the incident.
The blast sent flames racing through the district and smoke billowing high into the air.
Flames shot up from sewers and gutters and water from burst mains gushed through the streets.
Residents said the blast shook buildings as if there had been an earthquake, toppling small shops and overturning cars.
Rescuers formed a chain to pull dozens of injured from a vast crater in the street and picked their way through piles of rubble as they ferried the injured away on stretchers.
Those overcome by smoke were resuscitated in the street.
The body of a motorcyclist lay covered by a sheet next to his battered vehicle and another body had been placed on a slab of concrete next to piles of debris.
Kaohsiung authorities set up an emergency centre to be staffed by servicemen coordinating the rescue operation.
Firefighters regained control of the district by first light.
They moved in protective white gear through streets covered in upturned asphalt and smashed vehicles.