Sheriff Wally Olson said in a written statement the suspect had not been taken into custody.
Michael Senn, a pastor, told CNN affiliate WSFA that he spoke to several students who had been on the bus.
He said a girl described the shooter getting aboard.
"He told most of them to get off the bus," Senn related. "And then he grabbed a little boy and shot the bus driver four times."
CNN affiliate WTVY reported the child is being held by the shooter.
Olson said a command post had been established at Private Road 1539 and U.S. Highway 231 near Midland City, Alabama, in the southeastern corner of the state.
WTVY reported that authorities said a hostage situation was ongoing.