The attack took place in a mountainous district on the highway linking Paktia and Khost provinces.
The Taliban recently declared the start of a "spring offensive" of attacks.
"A large group of Taliban attacked a road construction company in Paktia province," Paktia provincial spokesman Rohullah Samoon is quoted by the AFP news agency as saying.
"The fighting between the company guards and Taliban attackers continued for two hours."
Bribes The attack took place at around 0200 local time (2130 GMT) at a roadside camp next to the highway they were working on.
The head of the construction company, Galaxy Star, said they were attacked by more than 100 fighters.
"They [the Taliban] destroyed a lot of our equipment including vehicles and equipment used for road construction," Noorullah Bidar said.
"We don't know why they attacked us... they are doing this to prevent reconstruction in Afghanistan."
The Taliban confirmed it had carried out the attack.
Road workers are frequently targeted by Taliban militants. Last December gunmen kidnapped four Turkish road workers and their local driver in Paktia.
In remote areas of Afghanistan, the Taliban and other insurgents often tax construction companies.
In some areas it is said to be impossible to carry out work without paying bribes to local commanders.
The BBC's Quentin Sommerville says the United States has been trying to stop development money falling into the hands of militant groups, particularly the Pakistan-based Haqqani militant network.
It has close ties to al-Qaeda, as well as the Taliban, and is known to operate in the area of Paktia.
This is the deadliest single attack by the Taliban in Afghanistan since February when militants killed 42 people in an attack on a bank in Jalalabad.