Around a dozen more people were buried when the landslip engulfed 16 homes in the village of Gaopo, according to state-run Yunnan Web website.
Emergency teams have so far rescued two injured people from the debris.
A video posted on a Chinese social networking site appeared to show a group of villagers digging through thick mud and debris to uncover a body, which was carried away on a stretcher.
"The landslide, which brought about several hundred thousand cubic metres of watery mud to the village, buried all of the houses there," the official news agency Xinhua quoted a local rescue team leader, Sun Anfa, as saying.
The conditions "created great difficulties for rescue efforts amid low temperatures", he added.
Snow was visible in images of the rescue, in an area that has experienced unusually low temperatures in recent weeks, with China suffering what authorities have called its coldest winter in 28 years.
The Communist party's top leaders Xi Jinping and Li Keqiang, along with premier Wen Jiabao, ordered "all-out efforts to rescue victims", Xinhua said, adding that more than 1,000 rescuers were on the scene.
Yunnan province, which borders Burma, Thailand, Laos and Vietnam, is a relatively impoverished area of China, where rural houses are often cheaply constructed.