The aircraft was carrying 106 passengers, nine crew members and had been due to land in Nairobi on Saturday at 6:15am (03:15 GMT).
Air traffic controllers picked up a distress signal from the missing airliner just after it took off from Douala airport in Cameroon, an aviation source said.
The signal was picked up by satellite at 0:100 GMT, a source close to the Agency for the Safety of Aerial Navigation in Africa told AFP.
Two Cameroonian army helicopters were dispatched to start searching a wide area south of the line between Douala and the capital Yaounde, 250km to the east.
Cameroonian authorities have set up two emergency centres, one in Yaounde and the other in Douala, to co-ordinate search operations.
Flight KQ 507 was flying from Abdijan in Ivory Coast to Nairobi via Douala.
Most of the passengers were connecting through Nairobi to other destinations outside Kenya.
A crisis centre has been set up at Kenya Airways headquarters at Nairobi airport.
In a press conference later on Saturday, Titus Naikuni, the Kenya Airways group managing director, said Cameroonian authorities had picked up an automatic distress signal from the area where a passenger jet carrying 114 people to Nairobi went missing.
Naikuni declined to confirm a Cameroon state radio report that the Boeing 737-800 plane had crashed in southern Cameroon.
But he told a news conference an electronic signal had been picked up from the area, indicating it could have come from the plane's black box. "The distress call came from a machine, not a pilot," he said.
Alfred Mutua, the Kenyan government spokesman, told the news conference the source of the signal was about 65 km southwest of Douala, where the plane took off.
"They have a helicopter in the area where the signal was coming from," he said, adding there had been no report yet from the search mission.
Experts from Kenya Airways and Kenyan government were due to fly to Cameroon later on Saturday, Mutua said.
Naikuni said the plane had 105 passengers and nine crew members, one less passenger than the airline had earlier said.
There were 34 Cameroonians, 15 Indians, five Britons and one American among the 105 passengers, the bulk of whom were from African countries.
The plane is six months old and no service history problems, Naikuni said. Kenyan media reported that there was rain in Douala when the plane took off.