The single-engine Beechcraft Bonanza took off from the airport at 11:20 a.m. Sunday on its way to Cortez, a city in southwest Colorado about 75 miles away, San Miguel County Sheriff Bill Masters said in a news release.
Air traffic control at the Telluride and Denver airports lost contact with the plane, prompting a search by the sheriff's office at 12:40 p.m. It was found crashed into a cliff band about a mile west of the airport at 5:17 p.m., and deputies confirmed there were no survivors, the sheriff said.
"This is certainly not the outcome we were hoping for, it's just a terrible, terrible tragedy," Masters said.
The cause of the crash is not yet known, Federal Aviation Administration spokesman Ian Gregor said. There was light snow, with visibility of 1 mile and light winds during takeoff, Masters said.
The last communication with the pilot was from the Telluride runway during takeoff, he said.
The sheriff said recovery efforts will start Monday and that the county coroner's office was expected to release the identities of those killed once their families are notified.
The sheriff's office said a helicopter it contracted, a fixed-wing aircraft from the Civil Air Patrol and deputies took part in the hourslong search.
Airport officials and the Telluride fire chief referred questions to the sheriff's office.
The FAA and the National Transportation Safety Board will investigate the accident, Gregor said.