The Airbus A320 – flight 4U 9525 – went down between Digne and Barcelonnette. None of the 144 passengers or six crew is expected to have survived.
The plane crashed after an eight-minute descent, an official said. It is not clear if it sent a distress signal.
The dead are believed to include 16 German schoolchildren. French and German leaders have expressed shock.
“This is the hour in which we all feel deep sorrow,” German Chancellor Angela Merkel told reporters, adding that she was planning to travel to the crash site.
A rescue helicopter has reportedly reached the site of the crash, in a remote mountain area.
Gilbert Sauvan, a local council official, told Les Echos newspaper that the plane had “disintegrated”.
“The largest debris is the size of a car,” he said.
The passengers included a German school class on its way back from an exchange trip.
Sandrine Boisse, a tourism official from the ski resort of Pra Loup, told the BBC that she had heard a strange noise in the mountains at around 11:00 (10:00 GMT).
“At first we thought it was on the ski slopes, an avalanche, but it wasn’t the same noise,” she said. “I think it was the noise of when a plane goes very quickly down.”
The plane began descending one minute after reaching its cruising height and continued to lose altitude for eight minutes, Germanwings managing director Thomas Winkelmann told reporters.
He said the aircraft lost contact with French air traffic controllers at 10:53 at an altitude of about 6,000 feet.
Although it began its life as an independent low-cost carrier, Germanwings is wholly owned by its parent Lufthansa.
It operates increasing numbers of the group’s point-to-point short-haul routes and takes many passengers from German cities to Mediterranean sunspots.
The airline has an excellent safety record with no previously reported accidents. The average age of its Airbus fleet is just over nine years old, though flight 4U 9525 was a 24-year-old A320.
The plan was to phase out the Germanwings brand and replace it with Eurowings.
There has been a longstanding dispute with the Vereinigung Cockpit union over early retirement. Pilots went on strike for three days around this time last year.
French Prime Minister Manuel Valls said he had sent Interior Minister Bernard Cazeneuve to the scene and a ministerial crisis cell had been set up to co-ordinate the incident.
The interior ministry said debris had been located at an altitude of 2,000m (6,500ft).
Spokesman Pierre-Henry Brandet told BFM TV that it would be “an extremely long and extremely difficult” search-and-rescue operation because of the remote location.
Spain’s King Felipe, on a state visit to France, thanked the French government for its help and said he was cancelling the rest of his visit.
The Airbus A320 is a single-aisle passenger jet popular for short and medium-haul flights.