Transport ministry official Hadi Mustofa told Indonesian media the aircraft, flight number QZ 8501, lost contact with the Jakarta air traffic control tower at 6.17am local time (2317 GMT).
"Search and rescue operations are in progress and AirAsia is cooperating fully and assisting the rescue service," the airline said in a statement. "At the present time, we unfortunately have no further information regarding the status of the passengers and crew members on board."
Singapore has activated multiple agencies, including its airforce and navy, to help Indonesian authorities with the search, the authority said.
Indonesian media said 149 Indonesians, three people from Korea, and one from Singapore, Britain and Malaysia were on board.
The aircraft was in the Indonesian Flight Information Region (FIR) when contact was lost around 200 nautical miles southeast of the Singapore-Jakarta FIR boundary, Singapore's Civil Aviation Authority said in a statement.
This story is developing. Please check back for further updates.