Five children are said to be among the dead and at least 30 people remain unaccounted for as a massive search for the trapped is under way.
The 6.3-magnitude quake struck at 0330 (0130 GMT) close to L'Aquila city, 95km (60 miles) north-east of Rome.
A civil protection official said 3,000 to 10,000 buildings in the medieval city may have been damaged.
"This means that we'll have several thousand people to assist over the next few weeks and months," Agostino Miozzo told Sky Italia.
"Our goal is to give shelter to all by tonight."
State of emergency
Earlier, the mayor of L'Aquila, Massimo Cialente, said some 100,000 people had left their homes.
A university dormitory, churches and a bell tower are believed to be among the buildings that had collapsed.
Residents and rescuers were using their bare hands to clear the debris from collapsed buildings. There were calls for quiet as they listened for signs of life amid the rubble.
Survivors, some still in their night clothes, hugged each other as they waited for news of friends and relatives.
Hundreds waited for treatment at the city's main hospital, where doctors were forced to treat people in the open air because only one operating room was functioning, Italian news agency Ansa reports.
The death toll has been rising steadily throughout the morning. The latest from Ansa is that 27 people are now dead.
But with many villages in the surrounding area still cut off by landslides, it is thought the full scale of the disaster will not become clear for many hours.
Phone and power lines remain down, and some bridges and roads have been closed as a precaution as the region was hit by a series of aftershocks.
Prime Minister Silvio Berlusconi has declared a state of emergency, and is reported to have cancelled a visit to Moscow to travel to the quake-hit area.
Panic
The earthquake happened hours after a 4.6-magnitude tremor shook the area but caused no reported damage.
Thousands of the city's 70,000 residents ran into the streets in panic during the 30 second tremor.
"We left as soon as we felt the first tremors," said Antonio D'Ostilio, 22, as he stood on a street in L'Aquila with a suitcase of clothes hastily piled together.
"We woke up all of a sudden and we immediately ran downstairs in our pyjamas," he was quoted by the Associated Press as saying.
A student dormitory was said to be one of the buildings badly damaged. Rescuers were reportedly searching the rubble for people feared trapped inside.
One student told Rai state TV that he managed to escape the building before the roof collapsed.
Public safety chief Guido Bertolaso warned of "numerous victims, many injured and so many collapsed homes" as he travelled to the scene, Ansa news agency reported.
Correspondents say that L'Aquila, capital of the mountainous Abruzzo region, has many old buildings not built to withstand a strong earthquake.
Even some modern structures on the outskirts of the city were reported to have collapsed.
The earthquake was also felt in Rome, where the BBC correspondent said he was woken up by the shaking.
Italy lies on two fault lines and has been hit by powerful earthquakes in the past, mainly in the south of the country.
