Black smoke was seen billowing from the charred wreckage of the Air Bagan aircraft, which came down near Heho airport -- the gateway to the popular tourist destination of Inle Lake.
An 11-year-old child on board was killed when the ageing Fokker-100 jet attempted to land in heavy fog, breaking its tail and catching fire, according to the information ministry.
It said 51 foreigners were among the 63 passengers on board the Christmas Day flight from Yangon via Mandalay. A motorcyclist on the ground was also killed.
Two Americans, one British woman and one Korean man were among those taken to hospital in nearby Taunggyi, according to Air Bagan, which described the incident as an "emergency landing".
The information ministry said on its website that the plane appeared to have landed in a field next to the runway due to the bad weather.
"Because of the emergency landing near the airport, the plane broke up in the middle," a government official told AFP, adding that passengers were evacuated.
A local tour guide waiting at the airport for passengers on the flight said the fire had "burnt almost the whole plane".
The two pilots were among those taken to hospital, according to Air Bagan spokesman Ye Min Oo.
"The cause of the accident is not clear yet. Only the pilots will know the cause, but we can't contact them yet as they have been sent to hospital," he said.
Air Bagan is one of several domestic carriers seeking to profit from a tourist boom in Myanmar as it emerges from decades of military rule.
It is owned by tycoon Tay Za, who is known for his close links to the former junta and has been blacklisted by the US Treasury which once described him as "a notorious regime henchman and arms dealer".
The Fokker 100, which is no longer manufactured, was one of two operated by the airline along with four ATR turboprop aircraft, according to the company's website.
Long isolated from the world under decades of junta rule, Myanmar has seen an influx of tourists and business travellers in recent months following a raft of political reforms.
The surge in demand for air travel has stretched Myanmar's aviation infrastructure, in particular in remote airports.
Yangon International Airport, the country's main terminal, is set to exceed its limit of 2.7 million passengers this year and the Department of Civil Aviation warned in July it needs urgent upgrading.