Armed police opened fire during two "terrorist incidents" at London Bridge and nearby Borough Market, a popular nightspot teeming with bars on a warm summer evening.
"We can confirm we have taken at least 20 patients to six hospitals across London," the London Ambulance Service said in a statement.
Witnesses described a van speeding into several pedestrians on London Bridge and then a knife-wielding man sprinting towards a bar packed with revellers enjoying a Saturday night out.
One witness described seeing five assailants and several people said they were locked inside pubs and restaurants by police and had to come out with their hands on their heads.
Italian photographer Gabriele Sciotto, who was watching the Champions League final at the Wheatsheaf pub in Borough Market, said he saw three men being shot just outside the pub.
In his picture, a man wearing combat trousers, with a shaved head and what looked like a belt with canisters attached to it could be seen on the ground with two more bodies behind him.
Pictures showed medical staff attending to apparent victims of the attack and a helicopter buzzing just metres over London bridge, one of the major arteries in the City business district.
Police responded rapidly with dozens of emergency vehicles and authorities led shellshocked members of the public away from the scene.
The attack came more than a week after a suicide bomber killed 22 people at a concert in the northern city of Manchester and days ahead of the June 8 election, where security is a major theme.
It also sparked harrowing memories of an attack on Westminster Bridge when 52-year-old British Muslim convert Khalid Masood rammed his car into pedestrians before crashing into the barriers surrounding parliament and then stabbing a police officer to death.
It is the latest in a string of attacks to hit Europe, including in Paris, Berlin and Saint Petersburg.
- 'Potential act of terrorism' -
Police said the first reports of a "vehicle in collision with pedestrians on London Bridge" came at 10:08pm local time (2108) and were quickly followed by "reports of stabbings in Borough Market," at the south end of the bridge.
"Armed officers responded and shots have been fired," police said.
Prime Minister Theresa May confirmed the "terrible incident in London" was being treated as "a potential act of terrorism."
She will hold an emergency ministerial meeting later on Sunday and Facebook activated its safety check function for people in London to let their loved ones know they are safe.
US President Donald Trump offered his help, tweeting "WE ARE WITH YOU. GOD BLESS!"
French President Emmanuel Macron said France was "more than ever at Britain's side."
US pop star Ariana Grande, whose concert in Manchester was the scene of a terror attack last week that claimed 22 lives, tweeted: "Praying for London".
Witnesses on London Bridge reported seeing a van mounting the pavement and hitting pedestrians and a man with a knife running.
"There was a van that crashed into the fences on London Bridge. And then there was a man with a knife, he was running. He came down the stairs and went to the bar," Dee, 26, who was visibly in shock and declined to give her last name, told AFP.
BBC reporter Holly Jones, who was there at the time of the incident, said she saw a van driven by a man travelling "at about 50 miles (80 kilometres) an hour".
She said about five people were being treated for injuries after the vehicle mounted the pavement and hit them.
"There's several police boats with torchlights searching the Thames at the moment," she told BBC radio.
She added that she saw a man, who had his shirt off and was in handcuffs, being arrested by police.
Alex Shellum at the Mudlark pub near the scene of the attack said a woman had come into the bar "bleeding heavily from the neck".
"It appeared that her throat had been cut," he told the BBC.
- 'Large blade' -
Another witness, who gave his name as Alessandro, also told BBC radio that he saw a van strike several people on London Bridge.
"I saw this van going left and right, left and right, trying to catch as many people as he could. And people just tried to get out of the way of the van.
"Then I tried to help people, wounded people."
Husband and wife Ben and Natalie told BBC Radio 5 Live they were outside Borough Market when they witnessed the incident there.
Ben said: "We saw people running away and then I saw a man in red with a large blade, at a guess 10 inches long, stabbing a man, about three times.
"It looked like the man had been trying to intervene, but there wasn't much he could do. He was being stabbed quite coldly and he slumped to the ground."
Ben said the man then walked towards the Southwark Tavern. He said they saw a metal chair being thrown towards the man.
"Then we heard three gunshots, definitely gunshots, and we ran."
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)