The explosion on the central Moscow metro railway, blamed by Kremlin on Chechen separatists, occurred at 8.30 am (0530 GMT), the morning rush hour.
A female bomber might have carried out the explosion, our correspondent reported, quoting Russian security sources.
Human bomb attacks in Moscow and elsewhere in Russia have been the trademark of Chechen separatists fighting Russian forces.
President Vladimir Putin, speaking a short while later, said, "Only by uniting forces, can we deal with terrorism -- this scourge of the 21st century."
Putin squarely blamed the Chechen fighters led by Aslan Maskhadov for the blast.
"We know for certain that Maskhadov and his people are linked to this terror," the Russian president said.
Chechen separatists, fighting a bloody battle with Russian forces since 1999, however, denied responsibility for the explosion that occurred between the Paveletskaya and Avtozavodskaya metro stations.
"We insist that we do not employ terrorist methods," Akhmed Zakayev, a representative for Maskhadov said.
"We have denounced and will continue to denounce terrorism in all of its forms," Zakayev said.
Havoc reigned outside the Avtozavodskaya station, the closest to the train when the blast occurred, as distraught parents searched for their children outside.
"My daughter is there!" a woman in her 50s, hair dishevelled,
cheeks covered in tears, shouted over and over.
"We saw them carrying bodies and injured covered in blood," said Lena, who works in a food shop 100 metres from the station.
A short time after the blast "a man came into the shop, he was shaking uncontrollably and covered in blood. He said 'give me a vodka,'" she said.
Chronology of bomb blasts in the Russian capital since 1999:
31 August 1999 - Bomb explodes in underground shopping centre. 20 hurt.
September 1999 - Bombs destroy apartment blocks in killing over 200 people.
5 July 2003 - Two women bombers kill 14 people at an open-air rock festival.
9 December 2003 - Explosion in central Moscow kills at least six people.
6 February 2004 – Scores dead in blast on a train on the central Moscow metro railway.
The man said that he was in another car of the train and walked out of the tunnel, past the affected carriage.
"He told us that he saw arms, legs scattered around the carriage," Lena said. "He said it was bloody carnage."
"It was an attack," said Kirill Mazulin, a spokesman for the Moscow city police, on the scene. "There is no doubt that it was a terrorist act," Mazulin said.
"The bomb was probably on a kamakaze terrorist" and had the power of one kilogram of TNT, Mazulin said.
A fire raged as a result of the blast and smoke poured out of the station after the blast. More than a 100 ambulances and fire trucks rushed to site.
More than 700 survivors of the blast, most of them Muscovites on their way to work, were evacuated from the metro nearly two hours after the blast.
Rescued travellers said the explosion blew out carriage
windows and started a fire. One woman said survivors walked
about two km along the tracks to safety.
The elaborately decorated Stalin-era underground system, the
pride of Muscovites for its clean marble tunnels and efficiency, is also one of the world's deepest.
The incident took place just six weeks before a 14 March election for president in which the incumbent Vladimir Putin is widely expected to win a second Kremlin term easily.