The typhoon shut down the stock market and forced the cancellation of hundreds of flights.
Local media showed severe flooding had left cars underwater and people swimming in Macau's city streets.
Three men aged 30 to 65 died, the Macau government said, while two people were missing. One of the men died after being injured by a wall that blew down, another fell from a fourth floor terrace and the last was a Chinese tourist hit by a truck.
Apple Daily showed footage of people swimming through muddy water in what are usually roads, and being swept off their feet by winds.
An employee at a local company said establishments were running on back-up power and without air conditioning or proper lighting.
He said power had been out across the whole of Macau but was beginning to return.
"Because many guests come in the summer, a lot of them have been stuck in the major resorts," the employee said.
"All transportations -- air, ground, sea -- have halted, so customers who have checked out cannot leave yet."
Residents took to social media to complain about city-wide power and mobile phone network outages.
Brian Chan, 31, said authorities had failed to give enough notice of the impending storm and were not properly prepared, describing the territory as "totally lost" in the typhoon.
The water supply was also limited, authorities said, and 50 flights cancelled from its international airport.
By evening, parts of Macau were still without power.
"Some have no tap water supply. The city looks like after an attack," Harald Bruning, editor of the Macau Post Daily, told AFP, describing it as the worst typhoon he had experienced in 30 years.
Hurricane winds and heavy rain had earlier hit Hong Kong, leaving an 83-year-old man dead after he fell into the sea, police said, and more than 80 injured.
The typhoon shut down the stock market and forced the cancellation of hundreds of flights in the worst storm the city has seen for five years.'Flying trees'
The typhoon passed as close as 60 kilometres (37 miles) and made landfall at noon (0400 GMT) in the southern mainland Chinese city of Zhuhai.
Thousands of people were evacuated on Tuesday in parts of south China in preparation for the typhoon's arrival, the official Xinhua news agency said.
Hato sent metres-high waves crashing into Hong Kong's shorelines with flooding knee deep in some areas.
Swathes of marine rubbish washed up on beaches and in coastal residential areas, including white globs of palm oil which have been coming ashore since a massive spillage at sea earlier this month.