Some guests leapt from windows to escape the blaze, which destroyed the six-storey Paris-Opera hotel, in a narrow street near the historic Garnier opera house in the city's ninth district, said a fire service spokesman, Laurent Vibert.
The cause of the fire was unclear.
Vibert said 57 people were injured, 12 seriously, from burns, smoke inhalation or shock. Two firefighters were slightly hurt.
"It was a serious fire. You don't often see such fires in Paris. There was only one staircase, and the fire broke out on the lower floors. There was no explosion."
Emergency services said they expected the toll to rise.
An emergency medical centre and a makeshift morgue were set up in the nearby Galeries Lafayette department store.
Fire trucks and several medical teams were called to the scene.
The budget hotel was home to
many immigrant families
Firefighters had the blaze under control by 3.30am (0130 GMT), about one hour after tackling it and the last flames were extinguished just before 6am. But they continued to search the top two floors, where thick smoke remained.
Vibert said 76 people were staying at the 32-room budget hotel, which local residents said was home to immigrant families, many of them African.
Interior Minister Dominique de Villepin visited the scene, his office said.
Several prostitutes working in small hotels in the area witnessed the fire.
One of them, Laure, 41, said she heard "screams and cries for help" from the guests who were caught by fire while sleeping and some of whom jumped from their windows.
"It was a serious fire. You don't often see such fires in Paris. There was only one staircase and the fire broke out on the lower floors. There was no explosion"
Fire service spokesman
Chakib San, who lives in an adjacent building, said he was awakened by cries of "Fire! Fire!" and saw three people jump from low floors of the building, including a woman and a child who lay motionless after hitting the ground.
"They were on the ground. They weren't moving," he said. "Everyone was screaming. There were bodies in the road."
The injured came from France, the United States, Portugal, Senegal, Tunisia, Ukraine and Ivory Coast, Paris police said. Vibert said a Canadian also was slightly injured. The nationalities of the dead were not given.
The dead were recovered "from the road, from inside, just about everywhere", he said.
The hotel owner thinks the fire broke out in a second-floor breakfast room, Vibert added.
San said he spoke to Australians, Canadians and Tunisians who escaped the fire. A woman who works in a nearby hotel brought out a ladder and together they used it to rescue a girl from the first floor, said San.
"We got out a little girl. The fire services arrived just afterwards," he said.