The US Geological Survey said the quake had a magnitude of at least 7.6 and the epicentre was 80km (50 miles) north-east of Islamabad.
Pakistan's army says it fears heavy damage in northern areas. A government official said the eventual death toll could be "very high".
Rescuers are trying to reach residents in collapsed buildings in Islamabad.
Residents in the Afghan capital, Kabul, and India's capital, Delhi, are also reported to have felt the tremor.
Maj Gen Shaukat Sultan, Pakistan's chief military spokesman, told the AFP news agency: "We have reports that an entire village has been wiped out in Bagh district in Kashmir.
"In Kashmir and the northern areas we are receiving reports of severe damage."
The BBC's Zaffar Abbas in the Pakistani capital, Islamabad, says aftershocks were being felt there and people were still out on the streets, afraid to go back into their homes.
Two apartment buildings collapsed in the city, reports say. Television pictures showed rescuers trying to reach trapped residents.
"This is the strongest earthquake I have ever witnessed in my life" Aisha Begum, resident of Srinagar, Indian-administered Kashmir
Government official, Mohammad Ali, told Reuters: "I just cannot say how many people are still under there and we are trying to evacuate them.
"Over 75 apartments were affected so the number of people is in the hundreds."
Pakistan's Geo television channel said it had reports of 25 people killed in Pakistan-administered Kashmir.
Mohammad Hanif, an official at the Pakistan Meteorological Department, told the Reuters news agency: ""We can say that it was one of the strongest earthquakes [ever] felt in Islamabad."
Police in the Pakistani city of Lahore told the Associated Press news agency that at least eight people were injured and four shops were damaged.
"It was so strong that I saw buildings swaying. It was terrifying," Hari Singh, a guard in an apartment complex in the Delhi suburb of Noida told Associated Press.
Haikal Shah Falah, a government employee in Jalalabad, eastern Afghanistan, said: "We've reports that two children were killed, one in Charbag and one in Chapliyar districts."
Aisha Begum, 84, a resident of Srinagar in Indian-administered Kashmir, said: "This is the strongest earthquake I have ever witnessed in my life."