Reuters reports the flight crew had asked for an "unusual route" before the flight disappeared.
The Kuala Lumpur, Malaysia-based low-cost airline offers both domestic and international flights, and it flies to 100 destinations in 22 countries.
Indonesian Transport Ministry spokesperson Hadi Mustofa said the plane lost communication with the airport of origin - Surabaya Juanda International Airport - 42 minutes after taking off at 5:27 a.m. Sunday local time (4:27 p.m. Saturday ET). It had been scheduled to land at Singapore's Changi Airport at 8:37 a.m. local (7:30 p.m. ET).
The plane was carrying 155 passengers (138 adults, 16 children, 1 baby) and 7 crew. Reports indicate passenger nationalities are as follows: 149 Indonesian, 3 Korean, 1 Singaporean, 1 Briton and 1 Malaysian.
The flight vanished over the Java Sea between Kalimantan and Java islands. Aircraft's last known contact was at location TAVLIP, at 32,000 feet in altitude.
Update - 11:02 pm ET: AirAsia has just posted the following to its Facebook page:
[News Update] AIRASIA INDONESIA FLIGHT QZ8501
AirAsia Indonesia regrets to confirm that flight QZ8501 from Surabaya to Singapore has lost contact with air traffic control at 07:24hrs this morning.
At the present time we unfortunately have no further information regarding the status of the passengers and crew members on board, but we will keep all parties informed as more information becomes available.
The aircraft was an Airbus A320-200 with the registration number PK-AXC.
At this time, search and rescue operations are in progress and AirAsia is cooperating fully and assisting the rescue service.
AirAsia has established an Emergency Call Centre that is available for family or friends of those who may have been on board the aircraft. The number is: +622129850801.
AirAsia will release further information as soon as it becomes available. Updated information will also be posted on the AirAsia website, www.airasia.com.
The airline also reset its logo and cover image on its Facebook page to grey.
Update - 11:05 pm ET: Satellite imagery from around the time of the plane's disappearance shows significant thunderstorms in the area. Aircraft had requested permission to climb from its assigned FL320 to FL380.
More as it becomes known.