The attackers targeted men but appeared to spare women and children in Seytenga District on Saturday night, the security source and two other sources said, all speaking on condition of anonymity.
No group immediately claimed responsibility, but the assault happened in borderlands where militants linked to al Qaeda and Islamic State are waging an insurgency.
About 3,000 people who fled the attack have arrived in Dori, the capital of Burkina Faso's surrounding Sahel region, where aid agencies are on the ground, said a local official who asked not to be named.
There were differing accounts of the death toll. While security sources said the death toll was at least 100, a local source who did not wish to be named said the provisional tally stood at 165.
The country on Monday began three days of mourning following the bloodshed.
The attack is the deadliest since the military seized power in January over frustration at failures to stem Burkina's years-long jihadist insurgency.
The new strongman, Lieutenant Colonel Paul-Henri Sandaogo Damiba, named security to be his key priority.
But after a lull, attacks resumed. Several hundred civilians and members of the security forces have died in the past three months.