"A 30-year-old man, motivated by a family dispute, killed 12 members of his family including has father and brother with a Kalashnikov weapon near the town of Faryab," in Kerman province, the provincial chief justice Ebrahim Hamidi was quoted as saying by the official IRNA news agency.
The man was killed during a shootout with security forces trying to capture him, the agency added.
Mass shoootings are rare in Iran, where people are only allowed to possess hunting rifles, reports BSS.
In January, an army conscript opened fire inside a military base in the same province, killing at least five other soldiers before fleeing.