One person has been arrested in connection with the incident in north London of a vehicle hitting pedestrians, killing one and injuring eight, police said on Monday.
Muslim leaders said worshippers were mowed down while leaving a mosque.
British Prime Minister Theresa May said the incident was a 'potential terrorist attack.'
Police said in a statement that there were "a number of casualties", and added that they were called to reports of "a vehicle in collision with pedestrians" at 00:20 am (4.50 am IST).
"We have been informed that a van has run over worshippers as they left #FinsburyPark Mosque. Our prayers are with the victims," the Muslim Council of Britain (MCB), an umbrella body, said on Twitter.
MCB head Harun Khan said the van had "intentionally" run over people leaving night prayers for the holy month of Ramadan.
An AFP reporter could see a helicopter and many emergency vehicles at the scene, which was closed off by a large police cordon.
Traffic was shut down on a section of Seven Sisters Road, where the incident happened.
"We saw lots of people shouting and lots of people injured," David Robinson, 41, who arrived just after the accident, told AFP.
The London Ambulance Service said it had sent "a number of resources" to the scene.
The mosque is near Seven Sisters Road and was once a notorious hub of radical Islamists but has entirely changed under the new management.
Its former imam Abu Hamza was jailed for life in New York on terrorism charges in 2015. He preached there from 1997 to 2003 before being jailed. He was later extradited to the United States.
Faith leaders in London held a moment of silence for victims.
In 2015, the mosque was one of around 20 that took part in an open day organised by the MCB to promote better understanding of Islam following Islamist-inspired attacks in Paris.
Despite the change in leadership and new focus on community relations, the mosque received a string of threatening emails and letters in the wake of the Paris attacks.