Hamdullah Mehsud, a resident, said three missiles hit a large high-walled house.
"Eight bodies have been pulled out of the rubble and five were wounded," he told the Reuters news agency.
A similar attack last Wednesday hit the house of Baitullah Mehsud's father-in-law in a village in the Makeen area of South Waziristan.
Pakistani officials say Mehsud, his second wife and bodyguards were killed in the attack.
But Taliban commanders insist their leader, who is suspected of masterminding the 2007 assassination of Benazir Bhutto, Pakistani's former prime minister, is alive.
Azam Tariq, a Taliban spokesman, telephoned the Associated Press news agency on Tuesday to confirm the US missile strike but denied there were casualties among Taliban fighters.
"An American missile hit a home in South Waziristan," he said. "Only innocent civilians were living there, and six of them died.
The US, which has put a $5m bounty on Mehsud's head, rarely discusses the missile strikes, which are carried out by unpiloted aircraft.
The pace of drone attacks in Pakistan's northwestern tribal areas has increased in the past year.