Terrified survivors - who moments before were laughing and dancing with friends - described how the gunman raked the club with bullets, prompting a police SWAT team to storm the venue.
President Barack Obama was being kept up to date by his homeland security and counterterrorism aide on what Florida officials said was being investigated as a terrorist attack. The federal government has offered its full support with the probe.
CBS News reported that Mateen - who died in a shootout with police after the siege - has no apparent criminal history.
Police have yet to officially identify the gunman.
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Briefing the media in Orlando, FBI special agent Ron Harper said the suspect may have had "leanings" toward Islamic extremism.
"Unfortunately there are people who died from gunshot wounds, maybe around 20, inside the night club," Orlando police chief John Mina told the briefing. He said around 42 injured were taken to area hospitals.
The chaotic events unfolded over a three hour period, beginning at around 2 AM when shots rang out amid the throbbing music at the Pulse Orlando nightclub near closing time.
Police said the shots were fired by a gunman armed with an assault rifle and a handgun.
A police officer working "extra duties" at the club responded, joined by two other officers, who engaged the suspect in a gun battle, Mina said.
"The suspect at some point went back inside the club where more shots were fired. This did turn into a hostage situation," he told reporters.
Police then stormed the venue, using explosives and breaking through a wall with a wheeled armored vehicle known as a BearCat. Mina said about 30 people were rescued during the operation.