Witnesses say the al-Rawda mosque in the town of Bir al-Abed, near al-Arish, was targeted during Friday prayers.
It is the deadliest attack of its kind since an Islamist insurgency in the peninsula was stepped up in 2013.
Egyptian President Abdul Fattah al-Sisi has held emergency talks with security officials to decide how to respond.
Local police said gunmen arrived in four off-road vehicles before opening fire on worshippers, AP reported.
Pictures from the scene show rows of bloodied victims inside the mosque. At least 130 people were wounded, reports say.
Locals are also quoted as saying that followers of Sufism, or Islamic mysticism, regularly gathered at the mosque.