The group of people was believed preparing to attack Yemeni troops, The New York Times reported.
Nader al-Shaddadi, a top al-Qaida leader in the region, was identified among the dead. He was found wearing an explosive belt around his waist.
Yemeni officials said the drone was U.S.-operated.
The terrorists were attacked less than a mile from a Yemeni brigade in the province of Abyan in southern Yemen, said Yemeni officials who were not authorized to speak about the incident.
Local residents said four of the eight other people killed were not known to them.
American drone attacks began in Yemen in 2009, but were suspended in May 2010 in part because of concerns about unintended civilian deaths. Late last month President Abdu Rabbu Mansour Hadi asked for the program to resume, praising the drones' precision and saying Yemen's air force did not have the skill to carry out night missions.