An opposition leader and former foreign minister, Roza Otunbayeva, said that new defence and interior ministers had been appointed.
The whereabouts of President Bakiyev are not clear but reports say that he has flown out of the capital, Bishkek.
Protests at rising prices, corruption and the arrest of opposition leaders had erupted in three cities.
Ms Otunbayeva said the interim government would remain in power for six months and draw up a new constitution.
Kyrgyzstan is a strategically important Central Asian state and houses a key US military base that supplies forces in Afghanistan. Russia also has a base there.
Russian PM Vladimir Putin denied that Russia had played any role in the unrest, saying it was a "domestic affair" and that there should be "restraint".
Russian President Dmitry Medvedev said the protests showed the "outrage at the existing regime".
A spokesman for Ban Ki-moon said the UN secretary general was "shocked by the reported deaths and injuries that have occurred today in Kyrgyzstan. He urgently appeals for dialogue and calm to avoid further bloodshed".
Gunfire is continuing into the night in Bishkek with shops set alight.
There is widespread looting, with hundreds of protesters moving from one store to another.
The Kyrgyz health ministry said 40 people had died in the clashes and more than 400 were injured.
But the opposition says that is far too low. In a broadcast on a TV channel it took over, spokesman Omurbek Tekebayev said at least 100 demonstrators had been killed.
The opposition used its channel to say that it was setting up a government that would be headed by former foreign minister, Rosa Otunbayeva.
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