The plane, a Learjet 35 belonging to the Reali air taxi company, had just taken off from Campo do Marte airfield on the outskirts of Sao Paulo for Rio de Janeiro, according to an official from the state airport authority Infraero.
The cause of the crash was not immediately known. The city has been hit by rainstorms but the weather was not especially bad.
The plane smashed into houses on the north side of Sao Paulo. Firefighters swiftly brought the blaze under control but witnesses said one house was demolished.
Reali staff were not immediately available for comment.
The plane had the capacity to carry 10 people but it was not known how many people were aboard. A rescue official said the first three victims identified were not passengers.
Campo do Marte serves as an airport for small charter planes and helicopters.
The crash was the fourth in Sao Paulo, Brazil's business capital, in four days and the latest of several in the past 14 months.
On Thursday evening, three helicopters crashed in the space of a few hours over the city, killing three people.
Sao Paulo has one of the world's largest helicopter fleets, with businessman flying over the vast city by chopper to avoid bad traffic and security threats.
Brazil suffered its worst plane crash ever in July when a TAM airlines Airbus skidded off the runaway on landing at Sao Paulo's domestic Congonhas airport and slammed into a building. A total of 199 passengers, crew and people on the ground were killed.
In September 2006, a Gol Airline passenger jet crashed in the Amazon jungle after it and a small private plane collided. All 154 people on board perished.
The head of the National Civilian Aviation Agency, Milton Zuanazzi, who was in charge at the time of both crashes, resigned last Wednesday.
Brazil's aviation system has been in chaos for more than ayear, with frequent delays and cancellations caused by staffing problems in air traffic control, overbooked flights, shortages of planes, weather problems and poor infrastructure.
