Worshippers had gathered for Friday prayers when a suicide bomber blew himself up outside the mosque.
IS has claimed responsibility for a series of attacks killing dozens of Shiites in Kabul over the past year, including twin explosions in July 2016 that ripped through crowds of Shiite Hazaras, killing at least 85 people and wounding more than 400.
The interior ministry confirmed that a "terrorist attack" had taken place.
More details are awaited. "Some people escaped out of the mosque including women, but there were four attackers who managed to enter the mosque".
The Islamic State, though its media agency Amaq, claimed responsibility for the attack.
Imam Zaman is one of the main Shi'ite mosques in the area and more people attend mosques on a Friday, the Muslim holy day of the week.
At least 20 people have died, and 50 others were injured, according to Ismail Kawosi, a spokesman for the Ministry of Public Health.
Eyewitnesses said the security forces arrived at the scene two hours following the attack.
Worshipers who jumped out of windows and fled barefoot described scenes of panic when gunmen entered the compound after an explosion believed to have been caused by grenades that were thrown at security guards at the entrance. Witnesses reported a blast followed by gunfire, according to a Kabul police official.
A member of Afghanistan's Shiite clerical council said there are at least two dead in the attack that is still underway at a Shiite mosque in Kabul. Among the security forces, two were killed and seven others wounded. They accuse police and troops of failing to protect them.
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