Early Friday, "there was an attack in Nangane district, where there are no security patrols. The attackers killed 12 people, mostly women and children," a police source in Cabo Delgado province, who asked not to be named, told AFP.
The attack took place in the village of Chicuaia Velha, just a few kilometres (miles) from Tanzania, forcing several thousand people to cross the border to seek safety, police said.
A local journalist said the villagers were killed by machete or died when their houses were set on fire by the attackers.
It was the third such incident in the last month in Cabo Delgado, leaving 20 dead in all.
The authorities have responded with a crackdown, rounding up some 200 suspects.
Over the past year, hardline Islamists have been active in the region, stoking unrest just as the government in Maputo is pushing ahead with oil and gas development in the province.