A Red Cross volunteer said the body hadn't been identified and rescuers were still searching for the remaining 12 miners.
Officials have reported deadly levels of poisonous gas in the mine.
The Red Cross volunteer said family members gathered in the church near the mine broke down after the news was broken to them by rescuers.
Rescue work is continuing but there's been no communication with the miners since they were trapped after an explosion at 6.30am (2230 AEDT) on Monday at the Sago mine.
Rescuers earlier drilled a hole into the mine. Air quality tests indicated more than three times the safe limit of carbon monoxide were present in the mine.
The levels were at "a very dangerous and toxic level" of 1,300 parts per million, and that "respirable air that exceeds 400 parts per million for 15 minutes' exposure is the upper limit that would sustain life,” said Ben Hatfield, president and CEO of the International Coal Group, which owns the Sago Mine.
No survivors seen
A camera dropped into a part of the mine about 76 metres below ground and almost three kilometres into the mine showed no survivors but also no sign of substantial explosive damage.
Rescuers dug by hand to prevent sparks from heavy boring equipment from setting off another blast, said Gene Kitts, a senior vice president of ICG.
They sent a robot into the mine to ensure that conditions were safe before rescue crews were sent deeper into the mine.
It is not known what caused the blast, however there are suggestions it may have been due to lightning as it occurred at the same time as a heavy thunderstorm in the region.
The worst-ever US mining tragedy took place in 1907 in Monongah, West Virginia, where an explosion killed 362 workers.
A similar rescue operation mounted near Somerset, Pennsylvania, in 2002 ended successfully, with all nine miners brought to the surface after more than three days underground.