According to one FBI official, Mateen had legally purchased two firearms within the last week.
President Barack Obama has condemned the massacre as an "act of terror and an act of hate", lamenting "how easy it is" for criminals to get their hands on weapons.
:: Obama: Orlando An Act Of 'Terror And Hate'
The names of the first victims to be identified have now been released by Orlando authorities - Edward Sotomayor Jr., 34, Stanley Almodovar III, 23, Luis Omar Ocasio-Capo, 20, Juan Ramon Guerrero, 22, Eric Ivan Ortiz-Rivera, 36, Peter O. Gonzalez-Cruz, 22, and Luis S. Vielma, 22.
Orlando Mayor Buddy Dyer said: "We're dealing with something that we never imagined and is unimaginable. There's blood everywhere".
He said a state of emergency has been declared in the city of Orlando and that he has asked Florida's governor to issue a state-wide state of emergency due to the "scale of the crime".
In a statement House Homeland Security Chairman Michael McCaul said: "This appears to be the worst terrorist attack on American soil since 9/11, and it is a sobering reminder that radical Islamists are targeting our country and our way of life."
US Congressman Alan Grayson told Sky News authorities are also investigating whether the attack was a "hate crime perpetrated against gays" after the gunman's father said the attack had "nothing to do with religion."
Mir Seddique told US media the massacre, which took place as the US celebrates LGBT Pride Month, may have been triggered by the sight of a gay couple kissing in Miami.
"He saw two men kissing each other in front of his wife and kid and he got very angry," he told NBC News.
The attack unfolded just after 2am when an officer working as a security guard at the club raised the alarm and engaged in a gunbattle with Mateen. The gunman then took a number of hostages inside the popular gay club.
Some clubbers mistook the sound of gunshots for music and the bar posted on its Facebook account: "Everyone get out of pulse and keep running."
A mother has told how her son texted her from the club toilets where he was hiding, telling her "I'm gonna die" and "Mommy I love you" before a final text saying: "He's coming".
Congressman Grayson told Sky News there was "some communication" between police and the gunman during the ensuing standoff.
"They (police) tried to coax him out and release the hostages at the same time as they were summoning the forces that they needed in order to go in and end the situation with the minimal loss of life."
At 5am police launched a mission to rescue the hostages and 11 officers stormed the club, shooting dead the attacker following a short gunfight.
One officer was shot in the head but his Kevlar helmet saved his life.
A surgeon at Orlando Regional Medical Centre has warned that the death toll is likely to climb.
Hundreds of people have lined up outside health centres to give blood to help the victims.
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