Television footage showed the three-story building engulfed in flames and dozens of firefighters battling the blaze in snowy conditions.
Pictures of the aftermath showed the blackened husk of the building, whose roof had apparently collapsed due to the fire.
The victims -- eight men and three women -- were among 16 residents of the facility in Sapporo, Hokkaido, run by a local organisation.
The other five residents escaped with minor injuries, a police spokesman told AFP, adding that authorities were investigating the victims' identities.
The facility is aimed at supporting elderly people with financial difficulties by offering low-cost accommodation and helping them find work, public broadcaster NHK reported.
The facility is usually unstaffed overnight, according to local media.
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