Seven people were taken to a hospital with injuries after the explosion and fire, Deputy Fire Chief Kenny Bacon said.
Fire Lt. Bonnie Hensley said firefighters put out the flames and then went through the rubble and damaged homes one at a time in case people had been left behind. She said they used search lights until dawn as they peered into the damaged and ruined homes. Two bodies were recovered.
Some witnesses said in televised reports that they heard people screaming "help me! help me!" after the explosion and fire and that two parents and two children were safely pulled from one house that caught fire.
The fire department has not released the names of those killed. Hensley said one body was found in one of the leveled homes after the fire was put out.
The explosion at 11 p.m. Saturday destroyed two houses that were side by side and spread fire to two other nearby homes in the neighborhood on the south side of Indianapolis.
Mark Lotter, a spokesman for the mayor, said about three dozen homes were damaged or destroyed. He said 27 were uninhabitable and another eight had significant damage.