Race relations have been under intense scrutiny during the past year, a period marked by protests at police brutality directed at young, black men.
Police said the victims had gathered in the church for a prayer meeting when the shooting occurred.
Police were searching for the suspect, described as a white male in his early 20s, clean-shaven and of a slight build. Police said he was wearing a grey sweatshirt, blue jeans and Timberland boots. He is believed to be the only shooter, Mullen said.
"This is the most unspeakable and heartbreaking tragedy," Charleston Mayor Joseph Riley said.
"People in prayer, coming together, praying and worshipping God, to have an awful person come in and shoot them is inexplicable, obviously the most intolerable and unbelievable act possible."
The victims had not been identified. Police said there were survivors but did not say how many or what condition they were in.
Police said the shooting occurred at the Mother Emanuel African Methodist Episcopal Church near Marion Square in downtown Charleston.
South Carolina Governor Nikki Haley said she was praying for the victims and their families.
"While we do not yet know all of the details, we do know that we'll never understand what motivates anyone to enter one of our places of worship and take the life of another," she said.
Armed police wearing bullet-proof vests swarmed the scene to search for the suspect. Police told reporters to back away, citing a bomb threat, the Charleston Post and Courier reported.
A helicopter hovered overhead as police sealed off nearby streets.
Emanuel AME Church has been a landmark in Charleston for more than 150 years.
Often called, "Mother Emanuel", it is one of the largest and oldest black congregations in the region, according to its website.
Pastor Clementa Pinckney, who is also a state senator, was in the church at the time of the shooting, a Statehouse Democratic caucus member told the Post and Courier. His condition was not known.
Thomas Dixon, a local pastor, told CNN: "It's really bad. It's a very bad scene. Apparently the person just entered the church and opened fire.
"That part has not been fully articulated on what happened yet ... they are still looking for the suspect."
The church was built in 1891 and is considered a historically significant building, according to the National Park Service. Charleston is known locally as "The Holy City," thanks to its large number of churches.
A group of men prayed in front of a hotel near the church. "We pray for the families, they've got a long road ahead of them," the Rev James Johnson, a local civil rights activist, said during the impromptu service.
- Washington Post-Bloomberg, Telegraph Group Ltd
