The 13-story building caught on fire around 3 a.m., fire department officials in the city of Kaohsiung said, AP reported.
Officials said "The fire caused 41 injuries and 46 deaths."
Firefighters were conducting search and rescue efforts into the afternoon.
The blaze was "extremely fierce," and destroyed many floors of the building, according to a statement from the fire department.
Firefighters are unsure of the source of the fire, but noted flames burned most intensely where a lot of clutter had been piled up.
Eyewitnesses told local media that they had heard the sound of an explosion around 3 a.m.
The building is about 40 years old, according to an official statement, with shops in the lower levels and apartments above.
While the fire has been put out, the lower levels of the building were completely blackened.