Initial reports indicated the blast may have been a gas explosion, the Chicago Tribune reported.
Police evacuated the immediate area.
Waukegan Fire Chief Patrick Gallagher said most of the injured were from a hair salon.
"Initially when you pulled up to the front of the building, you thought it was a lot worse than it is," Gallagher said.
A police officer witnessed the explosion as he was driving by, Deputy Fire Chief Dan Young said.
"It lifted the roof off of the building, then set it down. Then the walls collapsed inside," Young said.
Other buildings sustained broken windows.