The shells exploded after being fired into Akcakale from Tall al-Abyad in Syria, where forces loyal to President Bashar al-Assad are trying to put down an 18-month-old insurgency.
The dead are said to include a woman and her three children.
Later, reports said Turkey had struck back at Syrian targets.
A statement from Prime Minister Recep Tayyip Erdogan said Turkish forces had shelled targets along the border identified by radar, AFP news agency reported.
Turkish Deputy Prime Minister Bulent Arinc was quoted as saying that Syria must be made to account for the incident and there must be a response under international law.
Foreign Minister Ahmet Davutoglu contacted UN secretary general Ban Ki-moon, the UN’s Syria peace envoy Lakhdar Brahimi and NATO secretary general Anders Fogh Rasmussen after the incident, his office said.
The minister cleared his schedule and chaired an emergency meeting at the foreign ministry, it added.
Anders Fogh Rasmussen told Turkey’s foreign minister that he strongly condemned the incident, a NATO spokeswoman said, and continued to follow developments in the region “closely and with great concern”.
He has repeatedly said that NATO has no intention of intervening in Syria but stands ready to defend Turkey if necessary.
Akcakale has been fired on several times over the past few weeks. Residents have been advised to stay away from the border, and more than 100 schools have been closed in the region because of the violence in neighboring Syria.
Turkey’s state-owned Anatolia news agency reported that angry townspeople had marched to the mayor’s office to protest about the deaths on Wednesday.
Town mayor Abdulhakim Ayhan said: “There is anger in our community against Syria,” adding that stray bullets and shells had panicked residents over the past 10 days.
US Secretary of State Hillary Clinton said: “We are outraged that the Syrians have been shooting across their border… and regretful of the loss of life on the Turkish side.”
She added it was a “very dangerous” situation.
Although Turkish territory has been hit by fire from Syria on several occasions since the uprising against President Bashar al-Assad began, Wednesday’s attack is believed to be only the second time that people have died as a result.
Two Syrian nationals were killed on Turkish soil in April by stray bullets fired from Syria.
In Syria itself, at least 34 people have been killed and dozens wounded in a series of bomb explosions in the centre of Syria’s second city, Aleppo.
The attacks leveled buildings in the city’s main square. A military officers’ club and a hotel being used by the military bore the brunt of the blasts, some of which were carried out by suicide car bombers.
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