At least 152 Somalis and Ethiopians were aboard the overcrowded vessel which left Aden in southern Yemen on Tuesday, the UN refugee and migration agencies said in a joint statement.
"The vessel is believed to have been operated by unscrupulous smugglers who were attempting to take refugees and migrants to Djibouti, while also trying to extort more money from these refugees and migrants," according to the statement.
The boat turned back and "capsized amid reports of gunfire being used against the passengers", it said, adding that it was working with the Yemeni coast guard to try to establish what happened.
More than 9,200 people have been killed in Yemen since a Saudi-led military coalition intervened in 2015 against Huthi rebels with the aim of restoring the country's internationally recognised government to power.
But the impoverished country continues to draw migrants from the Horn of Africa, many of them seeking work in prosperous Gulf countries further north.
The UN Refugee Agency said it was "outraged" by the latest deaths.
"Prolonged conflict and insecurity in Yemen continues to expose vulnerable refugees and migrants to heightened risks of human rights violations including arbitrary arrest, detention, trafficking and deportation," it said on Twitter.
Last March, a helicopter opened fire on a vessel carrying more than 140 migrants in the Red Sea off the Yemen coast, killing 42 civilians.
A confidential UN report seen by AFP said the attack was most likely carried out by the Saudi-led coalition.
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