Hikmet Hajijev, Foreign Policy Adviser to the President of Azerbaijan, tweets that more than ten civilians were killed and another 40 injured.
According to Hajijev, more than 20 homes have been destroyed.
Ten civilians were killed when another residential area in Ganja was hit by a similar attack last Saturday.
A resident told AFP that he saw seven people being taken out of the ruins after the attack. It is unclear what their state of health is. Dozens are looking for survivors at the site.
Attack in Nagorno-Karabakh
The attack took place around 3 a.m. local time, just hours after an attack was reported in Stepanakert, the main town in the breakaway republic of Nagorno-Karabakh.
Azerbaijani authorities say the rocket was fired from Armenian territory, writes the Russian news agency TASS.
Ganja is the second largest city in Azerbaijan. Officials say that an industrial area in the city was also hit by a rocket on Friday, but so far few details are known about a possible second attack.
Since a ceasefire in 1994 put an end to a brutal war in which 30,000 people lost their lives, the region has been controlled by Armenian separatists.
The escalation of the conflict since September is the deadliest and longest since the war.
Both sides in the conflict accuse each other of having attacked civilian targets and of having started the fighting. Hundreds have been reported killed, many of them civilians.