The public RTP television channel said at least 35 people were injured when the tree toppled into a crowd near a church on the island's southern coast.
Amateur video posted online showed the tree smashing down, prompting panicked worshippers to flee. Thick foliage is later seen carpeting the floor as rescuers tend to the injured.
The Church of Our Lady of Monte, in a suburb of the capital Funchal, is the site of an annual religious gathering attended by large crowds of worshippers who flock there from across Madeira in honour of Mary, the island's patron saint.
Catholics around the world mark Assumption Day on August 15, which according to Christian tradition marks the Virgin Mary's death and the assent of the mother of Jesus Christ to heaven.
The crowd had gathered near the church by a fountain, which is surrounded by tall trees, to light candles in honour of Mary, TV station SIC Noticias reported.
RTP said authorities would release an official toll later Tuesday, while the Diario de Noticias da Madeira newspaper said 10 people had been killed and 15 injured, citing rescuers at the scene.
A security perimeter had been set up around the church, where worried worshippers were gathered waiting anxiously for news.
Madeira, a popular tourist destination, is the largest of several Portuguese islands in the north Atlantic Ocean.
It counts a population of more than 250,000, the vast majority of them Catholic.
Last year the Assumption Day festival, located in botanical gardens around five kilometres (three miles) from central Funchal, was cancelled due to forest fires.
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