The U.S. Geological Survey said it was a 6.2 magnitude quake that hit near the town of Norcia, in the region of Umbria, at 3.36 a.m. (0136 GMT).
The mayor of the small town of Amatrice reported extensive damage. "Half the town is gone," Sergio Pirozzi told RAI state television. "There are people under the rubble... There's been a landslide and a bridge might collapse."
The worst hit towns were believed to be Accumoli, Amatrice, Posta and Arquata del Tronto, Cari told Reuters, adding that helicopters would be sent up at first light to assess the damage.
"It was so strong. It seemed the bed was walking across the room by itself with us on it," Lina Mercantini of Ceselli, Umbria, told Reuters.
Olga Urbani, in the nearby town of Scheggino, said: "Dear God it was awful. The walls creaked and all the books fell off the shelves."
Residents of Rome, some 170 km (105 miles) from the registered epicentre, were woken by the quake, which rattled furniture and swayed lights in most of central Italy.
A 5.5 magnitude aftershock hit the same region an hour after the initial quake.
Prime Minister Matteo Renzi's spokesman said on Twitter that the government was in touch with the country's civil protection agency and following the situation closely.
The last major earthquake to hit Italy struck the central city of L'Aquila in 2009, killing more than 300 people.
A refuge on the Gran Sasso mountain, a popular area for hikers and climbers, said on its Facebook page that a large piece of rock had collapsed in Wednesday's quake.