Three Russian tourists trekking in the area are among the missing. Their names have not been released.
The floodwaters have swept into Pokhara, Nepal's second biggest city.
Police have been trying to reach the village in the Mount Annapurna area where the flooding started.
Map of Nepal
Fast-flowing floodwaters from the swollen Seti River smashed into two buildings and a number of shacks in Kharapani village, in the shadow of Mount Annapurna, police official Shailesh Thapa told the AFP news agency.
A number of people were swept away along with their houses and livestock.
Police are searching for more victims.
"Tourists flock to this area because there is a hot-water spring," an official from the Annapurna Conservation Area Project, named only as Paudel, told the AFP news agency.
"There hasn't been any rain recently, so we were surprised when the flood occurred at 09:30.
"The water has risen so high that it was up to a bridge. I found two truck drivers who had survived by fleeing to a hill nearby."
May is the end of the trekking season, but before the monsoon. The cause of the flood is not yet known.
One report said an avalanche on Annapurna had caused the river to back up before it burst its banks.
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