The Cessna 207 carrying a pilot and six passengers reported an engine problem shortly before the plane plunged into Lake Powell National Park near the small Arizona city of Page at around 5.30pm, the Federal Aviation Administration said in a statement.
Two passengers died, three suffered serious injuries and two others had minor injuries, according to authorities.
The identities of the victims have not yet been released.
The plane became submerged in the lake after the crash.
The FAA and National Transportation Safety Board are investigating the cause of the crash, the agency said in a statement.
According to the Lake Powell Chronicle, the Cessna 207 Turbo Stationair 8 aircraft was operated by Page-based American Aviation, which offers scenic charter flights in the region.
American Aviation did not immediately respond to a request for comment.
Lake Powell, an artificial reservoir on the Colorado River, was created by the flooding of the Glen Canyon in 1972, and attracts as many as two million recreational visitors each year.
The area has been plagued by a megadrought in recent years, with water levels dropping precipitously due to the climate crisis.