Contact was lost today with a passenger plane flying from Surabaya on Java island to Manado on Sulawesi island with 96 passengers and six crew on board, Indonesian officials said.
The plane was a Boeing 737 and the flight originated in Jakarta with a stop in Surabaya.
It left Surabaya at 1 p.m. (0600 GMT) and was scheduled to land just over two hours later in Manado in North Sulawesi. Contact was lost when the plane was at an altitude of 35,000 feet, about one hour before it was due to land.
Tatang Ikhsan, director general at the transport ministry, told a news conference that a Singapore satellite picked up a distress signal from a plane 83 nautical miles northwest of Makassar, the capital of South Sulawesi province.
"We call on other flights which crossed this route to provide information on any distress signal," he said.
Transport Minister Hatta Rajasa said the plane had been sighted above the Mamuju forest on Sulawesi. "Let's hope it made an emergency landing," he said.
An Adam Air Boeing 737-300 plane was forced to make an emergency landing in February at a small airport in East Nusa Tenggara province after a navigational failure caused the pilot to lose contact with the destination airport in Makassar.
Air travel in Indonesia, home to 220 million people, has grown substantially since the liberalisation of the airline industry after the Asian financial crisis in the late 1990s, which enabled privately owned budget airlines to operate.