Police said eight bodies had been recovered from the North Sea while the remaining eight people who had been onboard were unaccounted for.
The aircraft was returning from an oil platform just before 2pm when it went down 35 miles off the Aberdeenshire coast, according to the coastguard.
The coastguard was co-ordinating the search and rescue operation, using two RAF helicopters and a Nimrod.
A Maritime and Coastguard Agency spokesman said: "A supply vessel called Normand Aurora, which was quite close by, has put their fast response boat into the water and is looking for survivors.
"Two helicopters from the RAF have been scrambled to the scene and a Nimrod marine patrol aircraft has been diverted to the area. Aberdeen coastguard have begun broadcasting a mayday signal into the area and RNLI lifeboats from Peterhead and Fraserburgh are heading for the scene now."
Police said the aircraft was believed to have been flying back to Aberdeen from BP's Miller platform in the North Sea. Concerned relatives were asked to contact a special telephone line which has been set up on 01224 836479.The helicopter is operated by Bond Helicopters, the firm responsible for a helicopter that crashlanded in fog in the North Sea in February, with 18 people on board. Everyone survived that accident.
It is understood the helicopter involved in the latest incident is a Eurocopter AF332 L2 Super Puma, a different type from that involved in February's crashlanding.
Last month, 17 people were killed when a Sikorsky S-92A helicopter carrying oil workers crashed off Newfoundland in Canada.
Another terrible tragedy
may they Rest In Peace.
Condolences to the families
