The National Search and Rescue Agency (BASARNAS) said the domestic Trigana Air Service was carrying 49 passengers - including five children - and five crew members.
The plane was flying between Sentani Airport Jayapura and Oksibil in Papua, a region of Indonesia, and is said to have lost contact with air traffic control.
BASARNAS chief Bambang Soelystyo is reported to have told the Reuters news agency: "We can't confirm it has crashed. We can say contact has been lost with the plane."
The agency launched a search but suspended the investigation a short time later because of 'poor light'.
The agency tweeted: "Because it was night & visibility is limited we suspend search Trigana Air and we continue the search tomorrow morning."
The 45-minute flight took off at around 6:10am UK time and had been due to land at 6:55am.
The area which the plane was due to fly over is a mountainous and remote part of the province - which is eight hours ahead of UK time.
Trigana airlines was banned from flying in European airspace by the European Commission in 2007 because of safety concerns.
The Aviations Safety Network database says the airline has had 14 serious incidents since it was launched in 1991.
An AirAsia passenger jet crashed en route from the Indonesian city of Surabaya to Singapore last December, killing all 162 people on board.
The crash prompted the government to introduce regulations aimed at improving safety.
Indonesia's president promised a review of the aging air force fleet in July after a military transport plane crashed in the north of the country, killing more than 100 people.
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