The chopper smashed through the roof of the crowded Clutha Pub, where more than 100 revellers had been listening to a band on Friday night ahead of St Andrews Day, which celebrates Scotland's patron saint.
Witnesses said the helicopter with two police officers and a civilian pilot on board dropped like a stone, while people inside the pub heard a whoosh before the roof caved in and the air filled with dust and screams.
Firefighters said they had made "some contact" with an unknown number of people in the wreckage of the one-storey building, which was "very unstable".
"It's a case of working hard within the building to try and determine how many casualties are there," Fire brigade officer Lewis Ramsay told reporters
"We are determined that we are going to get the building stable and we will be in there to carry out those rescues."
Ramsay said the 125 firefighters at the scene had "rescued numerous casualties" who had "multiple types of injuries".
Scotland's First Minister Alex Salmond -- who just days earlier was celebrating the release of a legal blueprint for independence -- sadly confirmed that a police helicopter had been involved in the "tragic accident".
"Given an incident of this scale we must all prepare ourselves for the likelihood of fatalities," he said.
An AFP photographer at the scene said the helicopter appeared to have smashed through the top of the single-storey pub on the banks of the River Clyde, with a rotor blade sticking out of the roof.
Police officer Rose Fitzgerald said it was too early to say why the Eurocopter EC135 helicopter crashed.
"I can confirm there are a number of casualties but it is too early at this stage to provide further details. We will provide further updates at the appropriate time," she said.
Witnesses told of confusion, terror and then bravery after the accident.
Grace MacLean, who was inside the pub at the time of the crash, told BBC News that the revellers were listening to a Ska band at the time.
"We were all just having a nice time and then there was like a 'whoosh' noise -- there was no bang, there was no explosion," she said.
"And then there was some smoke, what seemed like smoke. The band were laughing and we were all joking that the band had made the roof come down.
"They carried on playing and then it started to come down more and someone started screaming and then the whole pub just filled with dust. You couldn't see anything, you couldn't breathe."
The band, Esperanza, later said on their Facebook page that they were all well.
Jim Murphy, a Labour party member of parliament and spokesman for international development, told the BBC he was driving through the area shortly after the incident.
"I jumped out and tried to help. There were people with injuries. Bad gashes to the head. Some were unconscious. I don't know how many," he said.
He said he and other people formed a human chain to get survivors out of the pub.
"The helicopter was inside the pub. It's a mess. I could only get a yard or two inside. I helped carry people out."
The pub is near Glasgow Central Mosque, the largest Muslim place of worship in Scotland. The mosque said it would make its premises and volunteers available to help if needed.
Gordon Smart, editor of the Scottish edition of Rupert Murdoch's Sun newspaper, said he saw the helicopter coming down.
"It was just such a surreal moment. It looked like it was dropping from a great height at a great speed. I'm about 80 percent sure that it was a police helicopter," he told Sky News.
"There was no fireball and I did not hear an explosion. It fell like a stone. The engine seemed to be spluttering."
British Prime Minister David Cameron said: "My thoughts are with everyone affected by the helicopter crash in Glasgow - and the emergency services working tonight."
Several pictures on social networks showed what the dark-coloured helicopter on the roof of the one-storey pub.
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