The collapse at the hydroelectric dam in Attapeu province late on Monday sent flash floods through six villages, Lao News Agency said.
More than 6,600 people have been made homeless, it added.
Pictures showed villagers stranded on the roofs of submerged house and boats carrying people to safety.
"The disaster has claimed several human lives [and] left hundreds of people missing," the agency reported.
The surge of water submerged homes and forced villagers to seek safety on the roof
Construction of the Xe-Pian Xe-Namnoy dam began in 2013 and it was due to begin commercial operations next year.
The main Thai stakeholder in the project, Ratchaburi Electricity Generating Holding, said it had received a report from the dam's operator that the "Saddle Dam D", measuring 770m long and 16m high, had collapsed.
It said continuous rainstorms had led "a high volume of water" to flow into the reservoir.
"Currently, Xe-Pian Xe-Namnoy Power Company Limited and related agencies have evacuated the people who reside around the area," the statement added.
Laos country profile
SK Engineering & Construction, a South Korean company with a stake in the project, told Reuters news agency that it was also "planning to help evacuate and rescue residents".
Prime Minister Thongloun Sisoulith has postponed government meetings and gone to the affected area in Sanamxay district with senior officials to monitor relief efforts, state media said.
Local authorities have appealed to government bodies and other communities to help provide emergency aid for the victims such as clothing, food, drinking water and medicine.
Hydroelectric ambitions in Laos
The government in Laos has launched an ambitious dam-building scheme to become the "battery of Asia"
Laos sits on the Mekong River and its tributaries - a perfect location for hydro power
The country had 46 operational hydroelectric power plants in 2017, and 54 more under construction
By 2020, Laos also plans to build 54 more electricity transmission lines and 16 substations
Laos already exports two thirds of its hydropower, with electricity making up roughly 30% of all Laotian exports
Sources: Hydropower.org, the Laotian Times and Lao News Agency
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