It was not immediately clear what caused the blast in the two-storey building in Plaka near some of Athens' most popular sites including the Acropolis and the Temple of Zeus.
Local media said a gas leak was suspected.
The building where the blast took place was reduced to a mess of twisted metal, broken balconies and hanging concrete slabs.
The explosion also sent rocks and broken glass flying as far as three blocks away.
The fire brigade was searching for five people, including an elderly couple that lived in the building, an official told Reuters.
Part of the building was rented out to tourists, a police official said.
The area is home to many hotels and short-term rentals.
Crowds of tourists stroll its narrow streets lined with cafes and souvenir shops.
Fire crews and ambulances rushed to the scene early on Friday as smoke billowed above the ancient monuments.
"It was like the whole building, the whole block blew off. That's how strong it was," local resident Andreas Martzaklis said.
Authorities said a passer-by was injured.
Two women who had been trapped in an adjacent building were rescued and being treated in hospital.
with AP
