At least 25 buildings were also damaged in the blast at 11.30am on a building site in Ludwigshafen, Rhineland-Palatinate.
The cause of the explosion is not yet known, police said.
It occurred when a gas pipe was exposed, according to the company responsible for the pipe, Gascade.
Local news site Rheinplafz.de
reported that the pipe exploded when it was hit by a digger.
One builder died and four other construction workers are seriously injured. Police initially reported that 21 people were hurt but have revised that figure down to 11.
The site is near a BASF chemical plant in the Oppau area of the town.
Police later tweeted a picture of the scene after the blast and said just before 3pm that the fire was under control. Flames reportedly shot 100 metres into the air.
Police, firefighters and rescue workers are all on site and have shut down the area. Several vehicles and at least 25 buildings were damaged in the blast.
A video on YouTube shows the scale of the devastation.
While an aerial photo shows a huge crater at the explosion site.