Six male fraternity members were sleeping in the Tau Kappa Epsilon house when the fire broke out about 6 a.m. Three managed to get out safely, university spokesman Jim Hollister said.
Hollister said it was too soon to tell whether the bodies were those of the missing students. He said the victims would be identified through dental records.
"We don't know whether they are male or female," Hollister said after the first two bodies were found in the ruins of the two-story wooden house, located in a hilly neighborhood about two blocks from campus.
The cause of the fire was not immediately clear.
Red-eyed students in sweatshirts huddled in small groups and talked quietly as fire officials and construction equipment sifted through still-smoking ruins. A neighboring white three-story home was scorched, and police said it sustained severe damage inside.
Bloomsburg University President Jessica Kozloff said the building was owned by the fraternity and had been maintained well. She said the university had revised its procedures to offer education and training for off-campus students after a fraternity house fire in 1994 killed five students.
"These are young adults who do make decisions on their own about their lifestyle and where they're going to live," Kozloff said. "We can't protect them from everything."
City officials cleared the house for occupancy after noting a dozen code violations in October, including a battery missing from a smoke detector, five electrical heaters being run on an inadequate electrical system, a missing doorknob and an empty fire extinguisher, said code enforcement officer Dean Van Blohn. He said the violations had been corrected by late January.
The house was required to have three smoke detectors, Van Blohn said.
"I can assure you that if we discover that this occurred because of any negligence ... we will certainly take measures to make sure it doesn't happen again," Kozloff said.
Two students escaped by jumping from a second-story window in their underwear, and a third fled out the front door, police said. All reported awakening and finding heavy smoke in the building; one reported hearing a smoke alarm.
Tau Kappa Epsilon, dormant on the Bloomsburg campus for some years, was restarted in 1997 with 18 members. It was in good standing with the university and the fraternity's national headquarters, Hollister said.
Another fraternity house fire killed five Bloomsburg students on Oct. 21, 1994. A smoldering sofa was blamed for that blaze. Batteries had been taken out of smoke detectors in the Beta Sigma Delta house, a common practice during smoky parties.
Earlier this year, a Jan. 19 fire in a dormitory at Seton Hall University iNew Jersey killed three students and critically injured six others.
Bloomsburg, founded in 1839, is a state university about 100 miles northwest of Philadelphia with an enrollment of about 7,500.