Iran's official news agency IRNA said the quake, with a magnitude of 5.9, shook southern Iran for 10 to 15 seconds at 1.53pm (1023 GMT) on Sunday.
"Four villages, which have a total population of 6000, have been damaged," said the governor of Qeshm island, Heydar Alishbandi.
Tahereh Irankhah, a volunteer with the Red Crescent in Qeshm, said the main hospital on the island was struggling to keep up with the number of patients.
"The number of people injured is very high, and people are in the corridors. We need tents and blankets," she said.
State media said there were three strong aftershocks.
"The earthquake was really strong and people poured into the streets in panic. My husband immediately rushed off to one of the stricken villages," said Sara Sadeqi, 22, a housewife in Qeshm City, the island's capital.
Hospitals are struggling to cope
with the number of patients
State television quoted the disaster centre in the province of Hormuzgan, which administrates Qeshm, saying 10 people were killed.
Regional Governor Heidar Alishvandi said 50 were injured.
Mohsen Kazemi from Iran's Red Crescent told Reuters the four hardest hit villages were Tonban, Gavarzin, Khaledin and Gourian.
Qeshm, the biggest island in the Gulf, is home to about 120,000 people and is off the coast of the port city of Bandar Abbas.
Thousands were killed in the Bam
earthquake in December 2003
State television said one of the villages on the island suffered 90% damage and put the intensity of the quake at 5.9 on the Richter scale.
The US Geological Survey said the quake was of 6.1 magnitude and placed it about 58km southwest of Bandar Abbas.
There is a large refinery at Bandar Abbas, but state television quoted Iran's OPEC governor, Hossein Kazempour
Ardebili, as saying the country's oil output and production facilities had not been affected by the quake.
Qeshm is famed for its palm forests, and its beaches are much loved by tourists and nesting sea turtles.
Iran is astride several major faults in the earth's crust and is prone to frequent earthquakes.
In February, a quake measuring 6.4 on the Richter scale hit the southern town of Zarand, killing 612 people and wounding 1400.
Residents fled high-rise blocks in
the UAE, where the quake was felt
In December 2003, the southeastern city of Bam was razed by a 6.7 degree quake that killed more than 31,000 people.
Sunday's quake was felt across the Gulf in the United Arab Emirates, where residents fled from high-rise office and apartment blocks.
"I took my baby and ran down the 10 flights to the street," one alarmed resident of Dubai said.
Dubai police chief General Dhahi Khalfan went on local radio to reassure residents and urge them to return to their offices and homes.