North Carolina National Guard Lt. Col. Robert Carver said there were multiple fatalities among Guard members aboard the plane and others were injured, CNN reported. The exact number of casualties wasn't released.
"There were lives lost; there were injuries," Carver said.
President Barack Obama said in a statement released by the White House that while the crash was still under investigation, "the crew of this flight -- along with their families and loved ones -- are in our thoughts and prayers."
"The men and women battling these terrible fires across the West put their lives on the line every day for their fellow Americans," Obama said. "The airmen who attack these fires from above repeatedly confront dangerous conditions in an effort to give firefighters on the ground a chance to contain these wildfires -- to save homes, businesses, schools, and entire communities. They are heroes who deserve the appreciation of a grateful nation.
"I know Americans across the country share my concern for the well-being of the surviving members of the crew and my deep condolences to the families of those who lost their lives. And I know that Americans join me in expressing my deepest gratitude for the selfless determination they and thousands of men and women involved in this fight in states across the country demonstrate every day."
Air Force spokesman Todd Spitler said C-130s with the Modular Airborne Fire Fighting System won't fly until further notice, CNN reported.
Carver said "about three dozen" aircraft are affected by the Air Force order.
It was the second crash in recent weeks of an air tanker on firefighting duty. One of the aircraft, which can release as much as 3,000 gallons of water or fire retardant in under 5 seconds, went down along the Nevada-Utah border.
The Fall River County Sheriff's office said a helicopter landed near the plane after it went down Sunday and evacuated three people, who were transported to a Rapid City, S.D., hospital for treatment, the Rapid City Journal reported.
A spokesman said he couldn't provide any other information about the plane, which went down during the White Draw fire, or its crew.
Rescuers were working at the crash site.
The fire, about 5 miles northeast of Edgemont, had burned about 4,200 acres since it started Friday and was 30 percent contained, officials said. No homes had been threatened, InciWeb, a fire-response Web site, said.
The South Dakota wildfire is one of many burning in Western states.
In Colorado Springs, authorities lifted evacuation orders for all but the hardest-hit areas in the Waldo Canyon fire, allowing residents to return to what's left of their homes Sunday, The (Colorado Springs) Gazette reported.
Evacuation orders remained in effect for about 3,000 of the 32,000 people forced to leave, officials said.
The Waldo Canyon fire, blamed for two deaths, was about 55 percent contained after having burned more than 17,800 acres since it began more than a week ago.
"Now we're beginning to look at how do we rebuild and begin the recovery," Colorado Gov. John Hickenlooper said Sunday on CNN's "State of the Union." "But we also know that Mother Nature can be pretty fickle out there, so we're keeping ourselves very alert."
The Gazette reported government environmental and health agencies were helping Colorado Springs residents displaced by the fire dispose of spoiled food by setting up disposal sites. On Sunday, more than 50 tons of food was tossed -- spoiled by the lack of power for many days.
The U.S. Air Force had deployed eight more C-130s to fight the wildfires in Colorado and other states, the U.S. Northern Command said in a release.
As of Sunday, Defense Department aircraft conducted 73 air drops and discharged more than 190,000 gallons of flame retardant during wildfire missions in Colorado, Wyoming, Montana and South Dakota, officials said.
The Waldo Canyon wildfire, estimated to cost more than $11.1 million so far, is one of 11 active blazes in Colorado, CNN reported. The U.S. Forest Service warned it could be mid-July before the fire is fully under control.