Djoko Murjatmojo, director general for air transportation at the Transportation Ministry, said the plane was flying at 32,000 feet (9,753 metres) when it contacted air traffic control in Jakarta requesting to change altitude to 38,000 feet.
At 6:16 am, the flight was still seen in the radar but two minutes later it had disappeared, he said.
"After 50 minutes of search, at 7:08 am the flight was declared missing and a distress call was issued," he said.
Murjatmojo said the plane's last known location was somewhere between Pontianak in West Kalimantan and Tanjung Pandan in Belitung Island near Sumatra.
"We can't assume anything at the moment. Our temporary assumption so far is that the flight has lost contact." Murjatmojo said.
AirAsia flight QZ8501 departed from Surabaya in East Java Sunday morning with 155 passengers aboard.