The accident took place on Thursday between two islands in Lake Victoria, the largest lake in Africa, which straddles the borders of Tanzania, Uganda and Kenya, reports CNN.
The exact number of those on board wasn’t immediately known because the ferry was overloaded, according to media reports.
Reports varied but the ferry may have carried between 400 and 500 people.
By Thursday night, 37 people had been pulled out of the water by emergency teams during a rescue operation, which was halted because of poor visibility.
Regional Commissioner John Mongella told Tanzanian television channel ITV that emergency teams would continue their search on Friday morning.
Boat disasters are frequent on Tanzania’s waters, where ferries often exceed their capacity.
Some 200 people were killed after an overloaded vessel hit strong winds off the island of Zanzibar in the Indian Ocean in 2011.
The boat had a capacity of 620 passengers but was carrying over 1,000 people.