The power cut occurred at 08:36 (05:36 GMT) on Monday due to a technical problem between Aluminum Bahrain (Alba) and the state electricity company which are linked in by a power loading share system, said a statement by the ministry of electricity.
It said work was under way to restore power in the country "within a few hours".
By the afternoon, power had been restored to small parts of the capital and the rest of the country.
Bahrain radio quoted an official as saying the power would be back on within hours and that technicians were working to fix the problem.
The ministry of electricity, meanwhile, asked residents to limit their usage of water.
Relying on generators
Some people needed help after getting stuck in elevators while shops and other businesses closed and many people returned home from work.
Some buildings, including hospitals, are relying on their own generators, which most residents do not have.
Bahrain's biggest hospital, Salmaniya medical centre, appealed to people over the radio to only visit the hospital if their condition was serious since it had no air conditioning.
The US Navy's Fifth Fleet, which has its home port in Bahrain, said it was using its own generators and that it had been largely unaffected by the blackout.
Power cuts are common in Bahrain during the summer, when capacity is not sufficient to meet the added demand of air conditioners and refrigerators.
Bahrain is 700 square kilometres in size and home to about 650,000 people, including 378,000 Bahrainis.