Istanbul Mayor Kadir Topbas said the collapse was the result of "serious negligence" on the part of a contractor hired to tear down an old building next door. He said careless work had damaged the foundations of the apartment building.
Local media said rescuers pulled two injured people from beneath the rubble. It was not immediately clear how serious their injuries were.
Residents were evacuated from the building just before it collapsed, Istanbul Governor Muammer Guler said. There were conflicting reports from local media and neighbors on whether the structure was six or eight stories high.
"Cracking was heard about half an hour before it collapsed and it was evacuated to a large extent," Guler said. "One or two people reportedly returned to pick up their belongings."
Vesile Vural, 55, said she saw the collapse from her apartment across the street.
"There were construction workers working on a new building next door, we were watching that," she said. "Then the other building collapsed all of a sudden. In a second, everything was under a cloud of dust."
She said many families lived in the apartment building.
The aftermath of the collapse was chaotic. Hundreds of rescuers in orange and red uniforms clambered over the rubble and sniffer dogs crawled through spaces in the building's wreckage looking for possible survivors. One elderly woman could be seen crying as she tried to lift debris with her bare hands.
Other women wailed as they walked past the rubble and a large crowd gathered around the site. Rescuers appealed for quiet so they could hear whether people were trapped in the rubble. Radiators, pipes, stoves and other household items shot out at odd angles from gaps in the debris.
Neighbors peered out from their balconies and windows, some holding their children and others climbing onto their roofs for a better view.
At dusk, rescuers set up lights on tripods and formed a human chain, removing small piles of rubble with their hands as they went. It was slow and painstaking work, with men dumping piles of masonry into plastic buckets and passing them hand-to-hand.
Despite the lights, much of the site became shrouded in darkness. An ambulance was parked at the edge of the rubble, its lights flashing, back doors open and medics at the ready.
Authorities evacuated two other nearby buildings as a precaution, said district mayor Osman Develioglu.
Building collapses are not uncommon in Turkey, where shoddy construction was blamed for the deaths of many of the 18,000 people who were killed during two massive earthquakes in 1999. Several contractors who were charged with negligence for ignoring building codes escaped punishment in February when statute-of-limitations expired in all ongoing cases that were filed in 1999.
In February, a five-story apartment building collapsed in Istanbul, killing two people and injuring 26 others.
Turkish rescue services have expertise in dealing with building collapses, a result of Turkey's long history of devastating earthquakes.
Turkish rescuers often carry out earthquake drills in this sprawling city of more than 12 million, which experts believe could be hit by a huge quake sometime in the next 30 years.
Geologists have urged the Turkish government since the 1999 earthquakes to tear down some 50,000 buildings that would probably collapse if a big quake hit Istanbul. They say hundreds of thousands of other buildings that rise in an unstable mass of brick, mortar and stone need to be reinforced.