The Sriwijaya Air Boeing 737 lost contact en route to Pontianak in West Kalimantan province, officials said.
Flight tracking website Flightradar24.com said the aircraft had lost more than 3,000m (10,000ft) in altitude in less than a minute.
Witnesses said they had seen and heard at least one explosion.
Fisherman Solihin, who goes by one name, told the BBC Indonesian service he had witnessed a crash and his captain decided to return to land.
"The plane fell like lightning into the sea and exploded in the water," he said.
"It was pretty close to us, the shards of a kind of plywood almost hit my ship."
A number of residents of an island near where the plane disappeared told the BBC they had found objects they thought were from the plane.
Difficult questions
The transport ministry said search and rescue efforts were under way.
It said last contact with the plane, with the call sign SJY182, was made at 14:40 local time (07:40 GMT).
There were thought to be 56 passengers and six crew on board, though the plane has a capacity of 130.
The usual flight time to Pontianak, in the west of the island of Borneo, is an hour-and-a-half.
According to registration details, the plane is a 26-year-old Boeing 737-500.
Sriwijaya Air, a local budget airline which flies to Indonesian and other South-East Asian destinations, said it was still gathering information about the flight.
The plane is not a 737 Max, the Boeing model involved in two major crashes in recent years.
The first of those, in October 2018, involved an Indonesian Lion Air flight which plunged into the sea about 12 minutes after take-off from Jakarta killing 189 people.
The BBC's Jerome Wirawan in Jakarta says that the latest events will bring up difficult questions and emotions in Indonesia, whose airline industry has faced intense scrutiny since the Lion Air crash.
That crash was blamed on a series of failures in the plane's design, but also faults by the airline and the pilots.
Old aircraft, but many still flying
The aircraft which appears to have been lost off Indonesia was a Boeing 737, but it should not be confused with the much more modern 737 Max - which was grounded following two tragic accidents in 2018 and 2019, including one off the coast of Indonesia.
The Sriwijaya Air flight appears to have been carried out by a Boeing 737-500. This plane formed part of the 737 Classic series, the second generation of 737, which was built during the 1980s and 1990s. The plane, seen as a workhorse aircraft for many years, has a strong safety record.
The Sriwijaya Air 737 was 26 years old. While airlines do tend to prefer to fly newer aircraft - because they have lower running costs - it is not uncommon to find planes of this age still in service.
Indonesia, though, has a relatively poor record on aviation safety. For more than a decade carriers from the region were banned from flying into the EU. Until recently, the perception had been that standards were improving, and in 2018 all Indonesian airlines were removed from the EU's blacklist.
That, however, was before the loss of a Lion Air 737 Max in October 2018. Although the design of the aircraft is widely believed to have been the main cause of the accident, investigators also highlighted issues such as poor maintenance procedures and inadequate flying skills as contributory factors.
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January 09, 2021 at 08:03PM
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Indonesia Sriwijaya Air passenger plane missing after take-off - BBC News
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