Despite police checkpoints around Ziketan in Qinghai province, many people fled to other areas in fear of becoming infected.
The area is mainly inhabited by Tibetan herders of yaks, sheep and pigs.
Chinese health officials said they were consulting with the World Health Organization on ways to contain the outbreak of plague.
The disease is mainly carried by rodents and other small animals, but it can also infect humans.
The pneumonic version of plague is caused by the same bacteria responsible for the bubonic plague, which killed 25 million people in Europe during the Middle Ages.
It is often airborne, making it easy to be contracted by humans. The people killed so far were neighbors, and the last victim fell ill after burying his dog, which had died suddenly.
China has experienced cases of plague before. A WHO report in 2006 said most cases in northwest China result from hunters becoming infected while skinning infected animals.
Eight villagers in Qinghai province died due to the disease in 2006 after killing or eating wild marmots, animals related to prairie dogs and gophers.