In a scramble to escape the fumes many clubbers rushed to the club's only open staircase to find the doors jammed shut. A number tripped and fell, precipitating a human avalanche which crushed some and left others suffocated.
Witnesses said they had seen victims with crushed faces and broken legs, a pregnant woman who was badly hurt and others pleading for water, air and ice. People were packed so thick on the floor that even four or five others pulling at them could not free them.
"You could see a mound of people," said Cory Thomas, who had gone to pick up two friends. "People were stacking on top of each other, screaming and gagging, I guess from the pepper spray. The door got blocked because there were too many people stacked up against it."
"People were banging on the door," said Carlisa Howard, who escaped from the club. "Girls were taking off their boots, pounding on the door."
Between 1,500 and 2,000 people had been at the E2 dance club on Chicago's south side, celebrating the long, President's Day weekend, when a fight broke out between two women. The bouncers used pepper spray and Mace to bring the situation under control, causing some to vomit and others to pass out while still others fled.
"It appears a disturbance from within led to a mass chaos where people headed for the door," said police officer Ozzie Rodriguez.
"Most of the fatalities appear to have been crushed or had injuries due to suffocation."
Amishoov Blackwell was checking in his coat on the second floor when people started rushing past him. The flow of the crowd pushed him back down the stairs and he fell on top of several people. He was trapped on top of the others until firefighters res cued him about 30 minutes later.
Kristy Mitchell was trampled on the stairway. "People were stomping my legs," she said. "When they pulled me up, I was dizzy and I couldn't breathe."
Last night 21 people had been confirmed dead and more than 50 had been taken to hospital with injuries, at least 19 of whom were in critical condition. "It wasn't nothing but two girls fighting," said Mr Blackwell. "Why'd they have to spray Mace?"
The club, which is often used as an hangout for hip-hop artists including P Diddy and R Kelly, stands above an upmarket restaurant in the heart of Chicago's African-American district.
Firefighters found a number of locked or blocked doors and used sledgehammers and bars to open some during the rescue effort, the fire commissioner, James Joyce, told reporters.
"There are people trying to get out that could not get out," he said. "Locked and blocked doors are a contributing factor. We can't explain how management or ownership would allow that."
Only one door was open to prevent people sneaking in without paying, according to the clubbers. The fire department commander, Will Knight, said the area was being treated as a crime scene.
Last night police said they were trying to unravel conflicting stories about the source of the spray and would be examining a video from inside the club. "We will get to the bottom of this," said the police commissioner, Terry Hillard. "Right now our investigation is at full tilt."
The president of a Chicago entertainment agency which has booked acts at the club said access to the building was unsafe for large crowds. "The doorway was obviously inadequate for an emergency," said Ron Onesti of Onesti Entertainment. "When the place is filled to capacity, the doorway is very thin."
The Rev Jesse Jackson arrived at the scene and urged community members to help each other. "We are asking area ministers to go to hospitals," he said. "My people are overwhelmed with the suddenness of this. At a time like this, you have to lean on your faith."