The single-engine propeller aircraft with a 36-year-old pilot and four passengers on board crashed at around 11:00 am (0200 GMT) shortly after leaving Chofu airport on the outskirts of the Japanese capital, public broadcaster NHK reported.
NHK, quoting police, said two people on board and one woman on the ground were killed while five others were injured.
Jiji Press news agency said the two who died aboard the plane were the pilot and a male passenger.
"We also carried three more people from the airplane and two other local residents to hospital, but their condition is unknown."
An AFP photographer at the scene saw rescuers rushing to an ambulance carrying two victims on covered stretchers with the remains of the charred fuselage of the Piper PA-46 nearby.
At least three houses and two cars were on fire in the residential district of Chofu just some 500 metres from the airport.
"At first I thought a large truck had crashed into a neighbouring house as I heard the ground shake and then I then saw this ferocious smoke," a female witness told AFP.
Television footage showed firefighters battling the blaze. The plane came down near a school, a baseball stadium and a shopping arcade.
"I thought it was flying quite low and then I heard a bang," a local resident who witnessed the crash told NHK.
"This place is close to the airport but I'm surprised because I had never thought that an airplane would crash," an 82-year-old woman told NHK.
The cause of the crash was not immediately known.
Police have launched an investigation into the accident on suspicion of professional negligence resulting in death, reports said.
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