Spanish airline Swiftair was operating the flight on behalf of Air Algerie and said there was currently no contact with the aircraft.
The airline has confirmed 110 passengers are on board the aircraft along with six crew.
The company said in a notice posted on its website that the aircraft took off from Ouagadougou, the capital of Burkina Faso, in west Africa at 02:17 GMT and was supposed to land in the Algerian capital Algiers at 0510 GMT but never reached its destination.
Contact was lost with flight AH 5017 around 50 minutes after it departed from Ouagadougou.
Swiftair has confirmed AH 5017 flies the Ouagadougou-Algiers route four times a week.
The plane's flight path is not yet known but it is likely to travel over Mali.
French troops are currently in the country in an attempt to combat Islamic terrorism in the country's southern Sahara and Sahel region.
They were ordered in by French President Francois Hollande in January in an attempt to retake the desert region lost to extremists.
The MD-83 aircraft is part of a family of twin-engine jets used for short and medium-range flights.
On June 3, 2012, Dana Air Flight 992 crashed into a building in Lagos, Nigeria, after one of the plane's engines failed.
All 153 passengers and crew were killed as were 10 people on the ground.