Boko Haram gunmen killed 43 people and razed scores of homes when they stormed two villages in the troubled state of Borno on Tuesday.
Borno state governor Kashim Shettima confirmed that 39 people were killed in the raid on Konduga village.
Dozens people were being treated for burn and gunshot wounds, a hospital source in the state capital Maiduguri told AFP.
Konduga resident Sulaiman Abubakar said that 400 gunmen dressed in military fatigues descended on the village around 5:30 pm and laid siege for several hours, destroying more than 2,000 homes.
However, these figures have not yet been confirmed by officials.
Those who fled the village have been too scared to return, multiple witnesses told AFP.
In the village dead bodies, including those of women and children, could be seen lined up in the courtyard of the central mosque.
The walls of the mosque were charred, as were those of a local clinic and a library.
A teacher at a local girls’ school who asked to remain anonymous said 20 masked gunmen broke into the buildnig, threatened the students and ordered them to stop studying and return home.
No students were harmed, but student and staff accommodation was set on fire and the school has been closed indefinitely and all the girls sent home, the teacher said.
Shettima told survivors Boko Haram was "better armed" than the Nigerian military and called for more troops to be sent to the state.
On January 5, President Goodluck Jonathan, charged the new heads of the armed forces as well as the Chief of Defence Staff not to sleep until the war on terror in the north-eastern part of the country was won and Nigerians in Borno State were also able to sleep.
Last year in May, emergency rule was declared in the states of Borno, Adamawa and Yobe as part of government efforts to curb violent activities of the Boko Haram.