They said the jet went off military radar "almost immediately" after taking off at around 8:40 pm (2040 GMT) from the central Indian air base of Gwalior and then crashed into a dense forest.
"The aircraft seemed to have caught fire while gaining altitude," an air force source told AFP in New Delhi as rescuers rushed to the site to hunt for its lone pilot.
On October 12, an Indian air force Mirage-2000 went down during joint maneuvers with the Singapore air force after its pilot lost control because of technical problems.
Another Mirage-2000 crashed close to crowded Gwalior city after losing its nosewheel in midair on September 23.
A defence ministry official said the latest crash was bewildering.
"We are really at a loss to figure out why we are now losing Mirage planes. They have been so sturdy since we inducted them (mid-1980s)," the official said, speaking on condition of anonymity.
India's air force has been plagued by crashes of its ageing fleet, although accidents involving Mirages have been rare, in contrast with its mainstay fleet of MiG-21 fighters which has frequently lost planes.
Four British-designed Jaguars crashed in quick succession earlier this year, killing three pilots including one whose parachute failed to open.