The Emergency Situations Ministry said 12 bodies have been recovered so far by emergency workers searching the hospital.
Russian news agency ITAR-TASS first reported that at the time of the fire, there were 38 people inside the hospital. Investigators say a nurse had heard the alarm, but because of heavy smoke only two patients were evacuated.
The blaze broke out around 2:30 am local time in Moscow in the part of the psychiatric hospital that houses patients with more severe conditions.
"The fire started when they were asleep," a law enforcement source told TASS. "Some of them tried to escape but were poisoned by the products of combustion," he said, using a technical term for smoke. "The building burned down almost completely."
The cause of the fire has not yet been determined, with the BBC noting one report said it was caused by a short circuit.
“All victims were found in their beds,” said Yuri Deshovykh, director of the Russian Emergency Situations Ministry’s oversight department. “There was no one in the corridor. Even the dead bodies of two nurses were found in their recreation room.”
RT reports that the entire one-story building was engulfed in flames by the time fire rescue crews arrived. The fire has since been extinguished.
According to RT, fires in medical buildings are common in Russia, with 18 documented cases in the past seven years.