The number of dead is unclear, but there are at least 20 shooting victims. Many of the shootings took place in a kindergarten classroom, sources said.
One entire classroom is unaccounted for outside the school, sources said.
A person believed to be a shooter is dead. Earlier reports of a second shooter are unconfirmed.
ABC News reported through federal, local officials that more than a dozen people, including children, were shot and killed.
Three people were brought to Danbury Hospital, but their condition is unknown. The emergency room is on lockdown.
Police were still searching the school at 11 a.m., and police dogs had been brought in. Around noon, the triage area was broken down, stretchers were taken away and the SWAT team left the building.
Soon after 9:40 a.m., police reported that a shooter was in the main office of the school. A person in one room had "numerous gunshot wounds," police said.
Groups of students some crying, some holding hands were being escorted away from the school by their teachers. Some students were still in the school at 10:30 a.m., parents said.
School and local emergency officials are accounting for the children, who will be released to their parents to get them home. A staging area has been set up at the Sandy Hook fire department, directly in front of the school.
Frustrated parents are trying to get information from officials, who are still actively searching the school. Eight-year-old Alexis Wasik, a third-grader at the school, said police were checking everybody inside the school before they were escorted to the firehouse.
"We had to walk with a partner," she said.
One child leaving the school said that there was shattered glass everywhere. A police officer ran into the classroom and told them to run outside and keep going until the reach the firehouse.
Dozens of state troopers are on the scene assisting local police. Heavily armed police gathered in front of the school around 10:45 a.m., and a number of stretchers were set up.
Area hospitals have been alerted.
Andrew Doba, a spokesman for Gov. Dannel P. Malloy, said the governor is monitoring the situation and is in "constant contact" with state police, who are coordinating with federal and local officials. Malloy will travel to Newtown later today, he said.