Brazil's Defense Minister Waldir Pires said the collision appeared to be due to human error.
"Only distraction by the crew seems to explain the collision," he told Bandeirantes television, adding that both planes had modern equipment, and that the area of the collision was well covered by radar.
As airborne search parties sought to detect traces of the missing jetliner during the night, dozens of relatives of the airline passengers rushed to Brasilia's airport hoping to get information about the fate of their loved ones.
The smaller plane, a Legacy 600 landed at an air base in northern Brazil's Serra do Caximbo, according to Embraer, the aircraft's Brazilian manufacturer.
It said the occupants of the plane were unharmed, but gave no further details.
Officials said the Legacy pilot told authorities about the collision that occurred about 200 kilometres south of the city of Cachimbo.
Jose Carlos Pereira, president of the Infraero company that runs Brazilian airports, said the collision occurred over Serra do Cachimbo, a densely forested, remote area of northern Brazil's Para state.
"Landing there would be a high-risk operation, but amazing things can happen in aviation, so we keep hoping," Globo television's online service quoted Pereira as saying.
Mr Pereira called the collision "unexplainable."
Civil aviation authorities said Flight 1907 of the GOL discount carrier was reported missing several hours after leaving the Amazonian city of Manaus on Friday, on a flight headed to Brasilia and then on to Rio de Janeiro.
Officials said two Brazilian Air Force planes with 20 people aboard, and two helicopters headed to the crash area, using infrared equipment to look for signs of the missing jetliner, but would have to wait until daylight to conduct a visual search.
Local hospitals were put on full alert.
Authorities said there were 149 passengers and nine crew members aboard the GOL flight.