More than 10 hours after the fire started in the northern Tai Po district, flames and thick smoke still engulfed the 32-storey towers as rescue workers swarmed the site and shocked inhabitants watched nearby.
The cause of the blaze was not immediately known but it was fanned by green construction mesh and bamboo scaffolding which the government began phasing out in March for safety reasons.
Working through the night, firefighters were struggling to reach upper floors of the Wang Fuk Court housing complex, which has 2000 apartments in eight blocks, due to the intense heat.
One 71-year-old resident surnamed Wong broke down in tears, saying his wife was trapped inside.
A firefighter was among the 36 killed, and 29 people were in hospital, Hong Kong leader John Lee told reporters.
About 900 people were in eight shelters.
"The priority is to extinguish the fire and rescue the residents who are trapped. The second is to support the injured. The third is to support and recover. Then, we'll launch a thorough investigation," Lee told reporters.
Harry Cheung, 66, who has lived at Block Two in one of the complexes for more than 40 years, said he heard a loud noise about 2.45pm and saw fire erupt in a nearby block.
"I immediately went back to pack up my things," he said.
"I don't even know how I feel right now. I'm just thinking about where I'm going to sleep tonight because I probably won't be able to go back home."
Frames of scaffolding were seen tumbling to the ground as firefighters battled the blaze while scores of fire engines and ambulances lined the road below the development.
From the mainland, China's President Xi Jinping urged an "all-out effort" to extinguish the fire and to minimise casualties and losses, China's state broadcaster CCTV said.
Hong Kong's sky-high property prices have long been a trigger for social discontent in the city and the fire tragedy could stoke resentment towards authorities ahead of a city-wide legislative election in early December.
Hong Kong's Transport Department said that due to the fire, an entire section of the Tai Po road, one of Hong Kong's two main highways, had been closed and buses were being diverted.
At least six schools will be closed on Thursday due to the fire and traffic congestion, the city's Education Bureau said.
It was Hong Kong's worst fire since 41 people died in a commercial building in the heart of Kowloon in November 1996.
That fire was later found to be caused by welding during internal renovations.
A public inquiry yielded sweeping updates to building standards and fire safety regulations in the city's high-rise offices, shops and homes.
Hong Kong is one of the last places in the world where bamboo is still widely used for scaffolding in construction.
The government moved to start phasing that out in March, citing safety.
It announced that 50 per cent of public construction works would be required to use metal frames instead.
Wang Fuk Court is one of many high-rise housing complexes in Hong Kong, one of the most densely populated areas in the world.
Tai Po, located near the border with mainland China, is an established suburban district with about 300,000 residents.
Occupied since 1983, the complex is under the government's subsidised home ownership scheme, according to property agency websites.
