At least two people died on the ground when the Hercules came down near Madiun, hitting houses before skidding into a rice field where it caught fire.
An air force spokesman warned the death toll could rise further as the evacuation of the crash site continued.
The plane had been flying from Jakarta to eastern Java when it crashed.
It missed landing at Iswahyudi air force base and struck houses in the village of Geplak, 4km away, at around 0630 local time (2230 GMT).
Visibility appears to have been good and there is no indication yet of why the plane crashed.
Initial reports say the last contact with the crew was a few minutes before the plane came down, as it was making its final approach to land.
Tail intact
Air force spokesman Bambang Sulistyo said the C-130 Hercules had been on a routine training mission, and was carrying 112 passengers and crew.
TV footage has shown soldiers with stretchers trying to evacuate casualties from the scene. Reports say the site is difficult to reach because it is on the edge of a rice field.
"About 15m of the tail is still intact but the body to the front is broken and burnt," said a local official named Suwardi in the district of Magetan.
"Earlier we heard blasts but not anymore, now the plane is still on fire."
A doctor in a hospital in Madiun, Restu Kurnia Cahyani, told Reuters they were treating four people for brain concussion and bone fractures.
The location of the crash is near the border of the districts of Madiun and Magetan, about 150km south-west of Indonesia's second-biggest city, Surabaya.
Air force accidents
Indonesia's air force has long complained of being underfunded and handicapped by a recently lifted US ban on weapons sales, correspondents say.
It has suffered a series of accidents, including a Fokker 27 plane that crashed into an airport hangar last month, killing all 24 aboard.
An Indonesian air force Hercules overshot the runway at Wamena airport in Papua on 10 May. One person was reportedly injured in that incident.
In response, the air force said it would check its Hercules fleet, which is being upgraded with airframe and engine capability improvements.
The Lockheed C-130 Hercules is in use around the world as a military transport with a reputation for versatility and performance.
