Malian army commander Modibo Nama Traore said 10 gunmen were involved, firing shots and shouting "Allahu Akbar", or "God is great" in Arabic before shooting at guards and seizing their captives.
Local radio claimed the attackers got into the heavily guarded hotel compound in a diplomatic vehicle, allowing them to avoid the usual stringent security checks.
Just after midnight (NZT), American and French forces were reported to have entered the hotel.
Accompanied by Malian soldiers, they were moving from room to room and rescuing guests. The fate of the jihadists was unknown.
The hotel attack comes just days after Isis gunmen massacred 129 people in Paris, reportedly in retaliation for the French government's decision to carry out air strikes against the extremists. Early today, there were fears that the Bamako attack may be linked to the Paris atrocities. France is Mali's former colonial ruler.
The hotel was hosting a major mining conference that was about to finish, according to Aislinn Laing, Africa correspondent for Britain's Telegraph newspaper group.
Those due to speak included the Malian prime minister, government ministers, African Development Bank representatives and directors of major mining firms operating in Africa.
In 2012, following a military coup, Islamic extremists took control of northern Mali, prompting a French-led military intervention that forced the extremists from northern towns and cities, though the north remains insecure and militant attacks have extended farther south this year.
In March, masked gunmen shot up a Bamako restaurant that was popular with foreigners, killing five people.
There are 1000 French troops in Mali, as well as many United Nations troops.
- Telegraph Group Ltd, Mail Online, BBC Online