More people were feared missing or dead, said Ismael Tani, an adviser to Djibouti's president, said by telephone.
"There were many dead," he said, adding that 69 was the provisional death toll.
Tani said officials believed more than 200 people were on board the vessel.
A U.S. public affairs officer from the Combined Joint Task Force-Horn of Africa, based in Djibouti, said the U.S. had offered assistance to the government.
"They asked us if we had any divers who could provide assistance," said Capt. Bob Everdeen. He said U.S. divers reported to the Djiboutian Navy headquarters.
Tani said it overturned in the harbor after leaving port about noon and "was probably overloaded."
No manifest was available for the boat, so officials do not know how many people were on it when it overturned, he said.
"It was a small boat headed for a traditional fair," he said.
The tragedy came nearly two months after 10 U.S. service members died when a pair of Marine Corps helicopters from a unit based in North Carolina crashed in the Gulf of Aden, near the northern coastal town of Ras Siyyan in Djibouti.
They were part of the Djibouti-based Combined Joint Task Force-Horn of Africa, which is responsible for fighting terrorism in nine East African countries.
The impoverished region is home to a sizable Muslim population.
U.S. officials say it has been used by terrorists as a place to hide, recruit operatives and stage attacks.