"The plane disappeared from the radar around the Bogor area. We are still looking for it and we are uncertain whether it crashed," said Gagah Prakoso, spokesman for the national search and rescue agency.
The plane, with 46 people on board, took off from east Jakarta's Halim Perdanakusuma airport, which is used for some commercial and military flights, at 2 pm (0700 GMT), he said.
"At 2:50 pm it dropped from 10,000 feet (3,000 metres) to 6,000 feet," the agency added in a text message to AFP.
Herry Bakti, head of the transport ministry's aviation division, said the aircraft was on the second of two demonstration flights, and those on board were invited guests.
The Russian Embassy had said in a statement earlier this week that a Sukhoi Superjet 100 demonstration would take place in Jakarta on Wednesday. The embassy could not be immediately reached for comment.
The Sukhoi Superjet, a mid-range airliner that carries up to 100 people, has been presented as Russia's contender to compete in the international civil aviation industry.
After its maiden flight in 2008 deliveries were delayed several times, but the planes are already in use with Russia's largest carrier Aeroflot and have been ordered by smaller airlines in Russia and abroad.
It claims to offer lower operating costs than rival aircraft made by Brazil's Embraer and Canada's Bombardier.