Rescue efforts are being hampered by the instability of the terrain and the prospect of more heavy rain.
The local municipal authorities had previously warned against the building of houses in Cambray because of the risks from high rainfall and unstable hillsides.
But the village has continued to grow over the last few years with houses constructed of concrete blocks, wood and zinc sheeting.
Mountainous Guatemala is one of the most vulnerable countries to natural disasters in the world because of its heavy rainfall and hurricanes and intense poverty which forces people to live in unsuitable areas.
The latest disaster may be the worst in a decade. In 2005 hundreds of people were buried after torrential rain in Panabaj in the municipality of Santiago Atitlan.
The authorities were forced to declare the area a cemetery because of the impossibility of recovering the bodies.