The plane, flown by an 80-year-old pilot, spiraled suddenly out of control and appeared to disintegrate upon impact.
Bloodied bodies were spread across the area as people tended to the victims and ambulances rushed to the scene.
Maureen Higgins of Alabama, who has been coming to the show for 16 years, said the pilot was on his third lap when he lost control.
She was sitting about 30 yards away from the crash and watched in horror as the man in front of her started bleeding after a piece of debris hit him in the head.
"I saw body parts and gore like you wouldn't believe it. I'm talking an arm, a leg," Higgins said "The alive people were missing body parts. I am not kidding you. It was gore. Unbelievable gore." Among the dead was pilot Jimmy Leeward, 80, of Ocala, Florida, who flew the P-51 Mustang named the "Galloping Ghost," according to Mike Houghton, president and CEO of Reno Air Races.
Renown Medical Center spokeswoman Kathy Carter confirmed that two others died, but did not provide their identities.
Stephanie Kruse, a spokeswoman for the Regional Emergency Medical Service Authority, told The Associated Press that emergency crews took a total of 56 injury victims to three hospitals. She said they also observed a number of people being transported by private vehicle, which they are not including in their count.