The single-engine Piper PA-46 propeller aircraft crashed shortly after it took off from Chofu Airfield on Sunday, Japan Times reported.
At the time of crash, a 36-year-old pilot was at the controls and the plane was carrying four passengers.
According to reports, fire caused by crash damaged and destroyed nine houses and two cars.
Two men aboard the plane and a woman in one of the houses were killed, while three other men from the aircraft and two other women on the ground sustained injuries and were taken to the hospital, police said.
"First, I thought a large truck had crashed into a neighboring house as I heard a rumbling noise. I then saw thick smoke,"a female witness was quoted as saying.
The plane was on a training flight from the airfield to Izu Oshima Island, roughly 100 kilometers to the south, according to the transport ministry and police.
Police launched an investigation into possible professional negligence resulting in deaths and injuries.