Of the six top nominees purportedly on the list, five are women.
At least two sources said with the short list in place, a nomination could come by the end of the month, CNN reported.
The network said among the finalists are U.S. appeals court Judges Diane Wood and Sonia Sotomayor; Solicitor General Elena Kagan; Homeland Security Secretary Janet Napolitano; Michigan Gov. Jennifer Granholm and California Supreme Court Justice Carlos Moreno, the only man.
Vice President Joe Biden, Chief of Staff Rahm Emanuel and David Axelrod are involved in the vetting process, the sources told CNN.
Souter, a nominee of former President George H.W. Bush who turned out to be one of the high court's staunchest liberals, is stepping down by the summer recess after 19 years on the Supreme Court.