Park County Sheriff Fred Wegener said the unidentified gunman turned his gun upon himself after shooting one of two girls being held hostage at Platte Canyon High School in Bailey, near Denver.
The man, believed to be in his 30s, opened fire as police stormed a second floor classroom when the gunman, who claimed to be carrying a bomb, broke off contact with hostage negotiators.
"Entry was made, the suspect shot one of the hostages and then shot himself, that's what it looks like at this time," Wegener told reporters.
Television footage showed the gunman's schoolgirl victim being stretchered out of the building before being airlifted to a Denver hospital by a waiting helicopter. A second hostage escaped unharmed.
"I have not yet been able to talk with the family of the female student that was shot but my prayers are with them," Wegener said.
Painful memories
The drama immediately evoked memories of the 1999 Columbine high school massacre in neighbouring Jefferson County, when 13 students were gunned down by two teenage pupils who then killed themselves.
Officer Wegener, who has worked in the small community of Park County for 36 years, admitted police were struggling to come to terms with the latest school shooting tragedy to hit Colorado.
"We're just shocked this has happened in a rural county," said Wegener, his voice trembling with emotion.
"I don't know the identity of the gunman, I don't know why he wanted to do this and hopefully the investigation will reveal who it is."
The siege began when the gunman entered the school at around noon local time and fired "more than one shot", claiming to be carrying a bomb in a rucksack, police said.
The gunman had initially taken six hostages in a second floor classroom but released four of them during the afternoon.
Officer Wegener said the gunman had communicated with police by asking his hostages to shout messages.
He said it was not clear what the gunman had been demanding.
"Your guess is as good as mine," Wegener said.
Police move in
A decision to storm the building was taken when the man broke off communications around 30 minutes before a 4:00pm deadline.
"It was decided that a tactical solution was necessary in an effort to save the two hostages that were in the room," Wegener said.
Earlier, the high school and neighbouring Fitzsimmons Middle School were evacuated while bomb squads and SWAT teams were deployed to the complex.
Television images showed dozens of students forming orderly queues before boarding school buses and being ferried away.
One student, 16-year-old Zak Barnes, described how pupils had burst into tears after being told a gunman was on the loose in the school before they were led to safety by a police officer.
"You would not expect this to happen in our school," he said.