The airline said in a statement that flight MH370 disappeared at 02:40 local time on Saturday (18:40 GMT on Friday).
It had been expected to land in Beijing at 06:30 (22:30 GMT).
The plane went off the radar near Vietnamese airspace, according to a statement on the Vietnamese government website.
Its last known location was south of Vietnam’s Ca Mau peninsular although the exact position was not clear, it said.
Malaysia Airlines said it was “currently working with the authorities who have activated their search and rescue team to locate the aircraft”.
“Our team is currently calling the next-of-kin of passengers and crew.”
The Boeing B777-200 aircraft was carrying 227 passengers, including two children, and 12 crew members.
In a brief press conference on Saturday, Malaysia Airlines chief executive Ahmad Jauhari Yahya said the company was still working to establish the location of the plane.
He said it was looking into various conflicting reports including earlier speculation that the aircraft had landed at Nanming in southern China.
He said the company was “deeply saddened” at the situation and that it would provide regular updates.
The passengers were of 14 different nationalities, he added.
Among them were 152 Chinese nationals, 38 Malaysians, 12 people from Indonesia and seven from Australia.
The pilot was Capt Zaharie Ahmad Shah, 53, who joined Malaysia Airlines in 1981, Mr Yahya said.
The flight went missing two hours after taking off from Kuala Lumpur.
The aircraft did not enter airspace controlled by China and did not make contact with Chinese controllers, China’s state-run Xinhua news agency said.
A statement on the Vietnamese government website said the plane had briefly entered the country’s airspace before the signal was lost.
It said crew had not made contact with Vietnamese air traffic control since.
The arrivals board at Beijing International Airport is showing no expected arrival time, reports the BBC’s John Sudworth at the terminal.
Our correspondent says there do not appear to be many relatives of the passengers in the arrivals lounge, possibly because they have already been taken away to be looked after.”This news has made us all very worried,” AFP quoted Chinese Foreign Minister Wang Yi as saying
“We hope every one of the passengers is safe. We are doing all we can to get more details.”
Fuad Sharuji, Malaysian Airlines’ vice president of operations control, told CNN that the plane was flying at an altitude of 35,000ft (10,700m) and that the pilots had reported no problem with the aircraft.
“Our thoughts and prayers are with all affected passengers and crew and their family members,” Malaysia Airlines said in its statement.
The airline is the national carrier of Malaysia and one of Asia’s largest, flying nearly 37,000 passengers daily to some 80 destinations worldwide.
The route between Kuala Lumpur to Beijing has become more and more popular as Malaysia and China increase trade, says the BBC’s Jennifer Pak in Kuala Lumpur.
The Boeing 777 had not had a fatal crash in its 20-year history until an Asiana plane came down at San Francisco airport in July 2014. Three teenage girls from China died in that incident.