Traces of explosives were found at two explosion sites, a senior police official said. Britain's Home Secretary Charles Clarke said there were three explosions in the subway and one on a bus.
Police confirmed fatalities but had not confirmed any numbers by early afternoon.
Pope Benedict XVI deplored the "terrorist attacks," calling them "barbaric acts against humanity," and said he was praying for the families of the victims.
Sir Ian Blair, London's police chief, said he was concerned the explosions were a coordinated attack but said he wouldn't speculate on who was responsible. He said officials had found indications of explosives at one of the sites.
Police said incidents were reported at the Aldgate station near the Liverpool Street railway terminal, Edgware Road and King's Cross in north London, Old Street in the financial district and Russell Square, near the British Museum.
Bradley Anderson, a subway passenger, told Sky News that "there was some kind of explosion or something" as his train reached the Edgware Road station in northeast London.
"Everything went black and we collided into some kind of oncoming train," Anderson said.
Simon Corvett, 26, who was on an eastbound train from Edgware Road station, said: "All of sudden there was this massive huge bang."
"It was absolutely deafening and all the windows shattered," he said. "There were just loads of people screaming and the carriages filled with smoke.
"You could see the carriage opposite was completely gutted," he said. "There were some people in real trouble."