The shallow 6.5-magnitude quake struck Pidie Jaya district at dawn, as some in the predominantly Muslim region prepared for morning prayers.
Mosques and shops were flattened in the small town of Meureudu, where the force of the quake sent people fleeing from their homes. No tsunami alert was issued.
The head of the local disaster agency, Puteh Manaf, said the sole hospital in the district had been overwhelmed by the number of injured.
"The data we have now is that 25 people have been killed and hundreds are estimated to have suffered injuries," he told AFP.
Rescue operations were under way to find those believed trapped beneath the rubble, with heavy machinery being used to shift the debris.
A witness said local residents were wandering the streets, unable to return to their damaged homes and fearing aftershocks.
Images from the scene showed homes levelled, mosque spires toppled and cars crushed under rubble.
Meureudu resident Hasbi Jaya, 37, said his family was asleep when the powerful quake struck.
"We immediately ran outside the house but it crumbled. Everything from the roof to the floor collapsed, and was destroyed," he said.
The local hospital was struggling to cope, with the injured being treated on the ground outside the front of the building.
Patients were also being sent to a neighbouring district with greater facilities, said deputy district chief Said Mulyadi.
He said at least seven children were among the dead, and many more had suffered broken bones and other injuries.
"There are many shophouses have caved in, and many (people) are alive but trapped," he said.
Seismologists said the earthquake was felt across much of Aceh province, which was devastated by the 2004 Indian Ocean tsunami.
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