The chartered passenger plane had taken off from the south Sinai resort of Sharm el-Sheikh bound for Saint Petersburg and lost contact with air traffic control 23 minutes later.
Ambulances reached the site of the crash, in a remote mountainous area in the middle of the peninsula, and began evacuating "casualties," officials and state media reported.
The head of the Egyptian civil aviation authority Mahmud al-Zinati told AFP there were "many dead", including 17 children.
The Kremlin said Russian President Vladimir Putin ordered Moscow's emergency ministry to dispatch rescue teams to Egypt.
The wreckage was found roughly 100 kilometres (60 miles) south of the North Sinai town of El-Arish, Egyptian officials said.
"Military planes have discovered the wreckage of the plane... in a mountainous area, and 45 ambulances have been directed to the site to evacuate dead and wounded," a cabinet statement said.
Officials and the state MENA news agency later said the "casualties" were being transferred to a Cairo morgue and hospitals.
There was no official word on the cause of the crash.
A senior Egyptian aviation official said the plane was a charter flight operated by a Russian company carrying 217 passengers and seven crew members, which was flying at an altitude of 30,000 feet when communication was lost.
At Saint Petersburg's Pulkovo airport, anxious family members awaited news of their loved ones.
"I am meeting my parents," said 25-year-old Ella Smirnova, a tall woman seemingly in shock. "I spoke to them last on the phone when they were already on the plane, and then I heard the news."
"I will keep hoping until the end that they are alive, but perhaps I will never see them again."
A senior official in Egypt air traffic control said that the pilot told him in their last communication that he was having trouble with the plane's radio system.
Russian aviation official Sergei Izvolsky told Interfax news agency that the plane operated by Russian carrier Kogalymavia had departed Sharm el-Sheikh at 5:51 am local time (0351 GMT).
He said the Airbus 321 did not make contact as expected with air traffic controllers in Cyprus.
- Communication lost -
"Communication was lost today with the Airbus 321 of Kogalymavia which was carrying out flight 9268 from Sharm el-Sheikh to Saint Petersburg," Izvolsky later told Russian television networks.
"The plane departed Sharm el-Sheikh with 217 passengers and 7 crew members. At 7:14 Moscow time the crew was scheduled to make contact with... Larnaca, however this did not happen and the plane disappeared from the radar screens."
The flight was scheduled to land at St Petersburg at 0912 GMT, he said.
Kogalymavia, which now operates under the name Metrojet, says on its website it has two A320 planes and seven A321s, and that it transported 779,626 passengers in the first nine months of 2015, according to the Russian aviation agency Rosaviatsia.
Egyptian state television reported that Prime Minister Ismail Sharif was headed to the site of the accident.
The last major commercial airliner crash in Egypt happened in 2004, when a Flash Airlines Boeing 737 plunged into the Red Sea after taking off from Sharm el-Sheikh.
The 148 people aboard that flight, most of whom were French, were killed.
Millions of tourists, many of them Russian, visit the resort town, one of Egypt's major draws for holidaymakers looking for pristine beaches and scuba diving.
The resort, and others dotting the southern Sinai Red Sea coast, are heavily secured by the military and police as an Islamist militant insurgency rages in the north of the restive peninsula, which borders Israel and the Gaza Strip.
Militants in the north who pledged allegiance to the jihadist Islamic State group have killed hundreds of soldiers and policemen since the army ousted Islamist president Mohamed Morsi in 2013. - AFP