Armed police opened fire during at least two "terrorist incidents" at London Bridge and Borough Market, in the heart of the capital’s business district.
Witnesses described a van speeding into pedestrians on London Bridge and then a knife-wielding man sprinting towards a bar packed with revellers enjoying a Saturday night out.
Pictures show medical staff attending to apparent victims of the attack and a helicopter buzzing just metres over London bridge, one of the major arteries in the City business district.
Police responded rapidly with dozens of emergency vehicles and authorities led shellshocked members of the public away from the scene with their hands on their heads.
The attack came more than a week after a suicide bomber killed 22 people at a concert in the northern city of Manchester and days ahead of the June 8 election, where security is a major theme.
It also recalled an attack on Westminster Bridge when 52-year-old British Muslim convert Khalid Mahmood rammed his car into pedestrians before crashing into the barriers surrounding parliament and then stabbing a police officer to death.
’Potential act of terrorism’
Police said the first reports of a "vehicle in collision with pedestrians on London Bridge" came at 10:08pm local time and were quickly followed by "reports of stabbings in Borough Market," at the south end of the bridge.
"Armed officers responded and shots have been fired," police said.
Prime Minister Theresa May confirmed that the "terrible incident in London" was being treated as "a potential act of terrorism."
She will hold an emergency ministerial meeting later on Sunday and Facebook has activated its safety check function for people in London to let their loved ones know they are safe.
US President Donald Trump offered his help, tweeting "WE ARE WITH YOU. GOD BLESS!"
London Mayor Sadiq Khan condemned the attacks as "barbaric."
’Blood on his shoulder’
Witnesses on London Bridge reported seeing a van mounting the pavement and hitting pedestrians and a man with a knife running.
"There was a van that crashed into the fences on London Bridge. And then there was a man with a knife, he was running. He came down the stairs and went to the bar," Dee, 26, who was visibly in shock and declined to give her last name, told AFP.
Gerard Kavanar, 46, said he had seen a chef with "blood on his shoulder" in the area.
The London Ambulance Service said "multiple resources" were being sent to the scene. AFP reporters saw two police helicopters over the area and several roads were shut down.
The police were urging the public to run to a place of safety, or hide if they cannot.
Will Heaven, managing editor of The Spectator magazine, said on Twitter he saw "two casualties -- one on pavement, one edge of road" and reported seeing armed police on the bridge.
BBC reporter Holly Jones, who was there at the time of the incident, said she saw a van driven by a man travelling "at about 50 miles (80 kilometres) an hour".
She said about five people were being treated for injuries after the vehicle mounted the pavement and hit them.
"There’s several police boats with torchlights searching the Thames at the moment," she told BBC radio.
She added that she saw a man, who had his shirt off and was in handcuffs, being arrested by police.
Another witness, who gave his name as Alessandro, told BBC radio that he saw a van strike several people on London Bridge.
"I saw this van going left and right, left and right, trying to catch as many people as he could. And people just tried to get out of the way of the van.
"Then I tried to help people, wounded people."
Of the casualties, he said: "Three of them, yes (were conscious), and one guy was not talking at all, was just, like, down."
"There were five or six people that we tried to help, they were young people."
Husband and wife Ben and Natalie told BBC Radio 5 Live they were outside Borough Market when they witnessed the incident there.
Ben said: "We saw people running away and then I saw a man in red with a large blade, at a guess 10 inches long, stabbing a man, about three times.
"It looked like the man had been trying to intervene, but there wasn’t much he could do. He was being stabbed quite coldly and he slumped to the ground."
Ben said the man then walked towards the Southwark Tavern. He said they saw a metal chair being thrown towards the man.
"Then we heard three gunshots, definitely gunshots, and we ran.", source from the Vietnamnews.