Air Bagan said the aircraft, an ageing Fokker-100, was forced to make an emergency landing two miles (three kilometres) from Heho airport, which is the gateway to the popular tourist destination of Inle Lake.
"One passenger who was missing was found dead inside the plane. We are still trying to identify who the dead passenger is," the carrier announced in a statement posted on its Facebook page.
The victim was an 11-year-old child, according to the information ministry, which added that four foreigners were among those hurt in the accident.
Another person was killed when the plane struck a motorbike on a road near the airport, it said.
The exact circumstances of the incident were not immediately clear, but a government official said a fire was reported in one of the engines as it approached Heho airport at around 9 am (0230 GMT).
"Because of the emergency landing near the airport, the plane broke up in the middle," the official tsaid on condition of anonymity, adding that passengers were evacuated.
A local tour guide waiting at the airport for passengers on the Air Bagan flight to arrive said the fire had "burnt almost the whole plane".
Air Bagan spokesman Ye Min Oo said the two pilots among the injured were taken to hospital, although their condition was not immediately known.
"The cause of the accident is not clear yet. Only the pilots will know the cause, but we can't contact them yet as they have been sent to hospital," he said.
Air Bagan is one of several domestic carriers seeking to profit from a tourist boom in Myanmar as it emerges from decades of military rule. It is owned by Tay Za, a tycoon known for his close links to the former junta.
The airline operates two Fokker 100 jets, which are no longer manufactured.
Long isolated from the world under decades of junta rule, the Southeast Asian nation has seen an influx of tourists and business travellers in recent months following a raft of political reforms.
The surge in demand for air travel has stretched Myanmar's aviation infrastructure, in particular in remote airports.
Yangon International Airport, the country's main terminal, is set to exceed its limit of 2.7 million passengers this year and the Department of Civil Aviation warned in July it needs urgent upgrading.
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