While UPS said the status of its crew remained unconfirmed, Birmingham Airport Authority Chairwoman Gaynell Hendricks and the city's mayor confirmed the deaths.
"It's a grim scene," Hendricks told CNN affiliate WBRC.
It appears the plane, an Airbus A300, broke into at least two pieces. A photograph provided by city officials shows the crumpled front portion of the plane resting in a debris-strewn field.
The plane, which took off from Louisville, Kentucky, went down on a street that runs parallel to the Birmingham-Shuttlesworth International Airport, Mayor William Bell said.
The location is about a half mile north of the runway, FAA spokeswoman Kathleen Bergen told CNN.
What caused the jet to crash around 4:45 a.m. (5:45 a.m. ET) was unclear. The crew did not report any trouble, Bell said, citing conversations with control tower officials. Light showers and a visibility of 10 miles were reported in the area of the airport at the time of the crash, according to CNN meteorologist Dave Hennen.
The National Transportation Safety Board expected to have a team on site by 11 a.m. (noon ET), NTSB board member Robert Sumwalt told reporters.
Bell said no buildings were hit and no one on the ground was injured. But WBRC, citing Chris Brooks, assistant fire chief of operations for Birmingham Fire and Rescue, reported that emergency crews were not sure if anyone had been injured on the ground.
Crews were still working to put out fires around the wreck, Brooks told the station, adding that he believes damage extends over about a half mile.
Alabama Power cut electricity to about 140 buildings near the crash site as a precaution, utility spokesman Michael Sznajderman told CNN.
Airport neighbor Sharon Wilson told WBRC the plane seemed lower than usual for flights into the airport and sounded like it was sputtering as it flew overhead.
"We heard this loud boom, like, jump up out of your bed," she told the station.
CNN affiliate WVTM said witnesses its crew had spoken with also reported hearing "a large boom," followed by several other explosions.
"This incident is very unfortunate, and our thoughts and prayers are with those involved," UPS Airlines President Mitch Nichols said in a written statement.
The plane was one of two flights UPS sends to Birmingham each day, company spokesman Mike Mangeot told CNN affiliate WBRC.
The plane that crashed Wednesday was built in 2003 and had 11,000 hours in the air spread over 6,800 flights, Airbus said in a news release.
Only UPS and FedEx fly the A300 in the United States, according to its manufacturer, Airbus. While it was once used for commercial passenger flights in the United States, the plane is now used only for cargo flights. UPS has 53 of the planes, according to Airbus.
Wednesday's crash is the second involving an A300 in the United States. In 2001, an American Airlines A300 crashed in the Belle Harbor neighborhood of Queens, in New York City, shortly after takeoff from John F. Kennedy International Airport.
All 260 people on board the plane, as well as five people on the ground, were killed.
The cause was ultimately attributed to pilot error, according to the NTSB, which said the first officer put excessive pressure on the rudder pedal, causing the separation of the vertical stabilizer.
The Birmingham crash is the second fatal accident involving a large jet in the United States since early July, when an Asiana Airlines Boeing 777 crashed on landing at San Francisco International Airport. Three people died.
Wednesday's crash comes nearly three years after UPS's last major incident, the crash of a Boeing 747 in Dubai, United Arab Emirates, that killed two crew members.
Investigators traced the crash to a large fire in the cargo hold, which included a number of flammable lithium batteries, according to the country's General Civil Aviation Authority.
In 2006, a McDonnell Douglas DC-8 flown by UPS caught fire after landing at Philadelphia International Airport. Three crew members on the plane evacuated with minor injuries, according to NTSB records. Most of the cargo was destroyed.
CNN's David Mattingly reported from Birmingham, with Michael Pearson writing in Atlanta. CNN's Marlena Baldacci, Aaron Cooper, Mike Ahlers and Stephanie Gallman also contributed to this report.