The Twin Otter plane took off Wednesday morning from the city of Pokhara was scheduled to land in the town of Jomsom, Tara Air spokesman Bhim Rai said.
The total flight time was supposed to be 19 minutes, but contact was lost eight minutes after takeoff.
Eighteen passengers and three crew members were on the plane, Rai said. The passengers include two foreigners -- one Chinese and one Kuwaiti.
Rai said the weather Wednesday morning was clear when the plane took off. He said the Twin Otter plane was new, imported from Canada last September.
An army helicopter and two private helicopters have been deployed in the search.
Pokhara, where the flight originated, is one of the most popular tourist destinations in Nepal. Jomsom is the gateway for one of the most popular Himalayan trekking routes.