The crash is Brazil's deadliest since a TAM Express plane crashed and burst into flames at Sao Paulo's Congonhas airport in 2007, killing 199 people.
It is currently unknown what caused the ATR 72-500 to crash.
Authorities said they had recovered the flight data recorder.
French-Italian aircraft manufacturer ATR said it would cooperate with the investigation.
According to tracking website Flightradar24, flight 2283 was scheduled to take off from Cascavel at 11:56 a.m. local time (2:56 p.m. GMT) on Friday and arrive at 1:40 p.m.
The last signal received from the aircraft was about 20 minutes before its scheduled landing time.
Brazil's Civil Aviation Authority said the plane, built in 2010, was “in good operating condition with a valid registration and airworthiness certificate.”
He added that all four crew members on board at the time of the accident were fully licensed and had valid qualifications.
The Uopécan Cancer Hospital in Cascavel told BBC Brazil that two of its residents were among the passengers who died.
Local residents saw the plane crash, while others said their homes were damaged.
Luis Augusto de Oliveira told Reuters that he, his wife and a servant were at home when “suddenly we saw an aircraft exploding in our backyard”.
“I thought the helicopter was broken because of the noise when it crashed,” he said.
He added that no one in the house was hurt and that there was some damage, but “as little as possible, to material goods. I have to thank God for the way the plane went down.”
