Police were alerted by Lauren Pilkington-Smith's parents on Thursday when she had still not returned to her home in Leigh, Greater Manchester, by 10.15pm.
Her body was discovered in bushes close to the Leeds-Liverpool canal at around 2.30am yesterday.
As police cordoned off the scene to allow forensic scientists to search the area for clues, a police spokesman said Lauren's death was being treated as suspicious.
Superintendent Shaun Currie, who is leading the inquiry, said: "So far we know of three or four friends that she was playing with of her age.
"She left her friends and when her parents realised that she had not come home they contacted police, which was around 10.15pm. At this stage we have no idea why she left her friends or where she was planning on going.
"We do not know the full extent of what happened. Her body was found in thick undergrowth, dense with bushes and trees, and it is taking a long time to secure the forensic evidence."
Supt Currie said that since Lauren's death the police had received one or two reports of suspicious strangers seen in the area, but said there was no indication that this was connected with the murder.
"But we are conducting a murder investigation so we are satisfied that the circumstances are suspicious enough to consider it murder," he said.
Lauren lived on Twist Lane with her parents, Alison Pilkington and Glen Smith, four-year-old brother Sam, and sisters Rebecca, 15, and Ciara, aged two and a half.
A neighbour, who did not want to be named, described the 10-year-old as "a lovely little girl who was really chatty and very well liked in the area" but looked much younger than her age.
"She was only a tiny, dainty thing, and it didn't look like she was 10. She looked a lot younger," said the neighbour.
"A lot of people in the area will be very upset to hear the news. Our hearts go out to her family."
In a statement her parents described their "tomboy" daughter as "football mad" and said she loved Manchester United as well as playing golf and riding her BMX bike.
"Lauren was a beautiful, lively little girl and the family has been left devastated by what has happened," said the statement.
"Our world has collapsed in the past 24 hours and we can't even begin to think about what we will do without her.
"Lauren was a tomboy who loved playing out and everyone around here adored her.
"We don't know how we can come to terms with this.
"She loved school, and was due to go to big school this year."
At the Leigh Church of England Primary School, where she had been a "lovely, lively, and successful" pupil, the headmaster Brian Fawcett held a special assembly to break the news to pupils and staff.
"All of us in school are absolutely devastated and saddened by the tragic news of Lauren's death," he said.
"Lauren was a happy, popular and successful pupil in our Year Six age group and our sincere condolences and love are extended to Lauren's family."Reuse content