The two-year-old boy was taken as he paddled in view of his family, from Nebraska, on the sandy shore of the Seven Seas lagoon at Disney's Grand Floridian Resort and Spa.
A search for the child has continued throughout the night but has so far been unsuccessful, nearly eight hours after the incident occurred.
“It’s my understanding the father was there nearby and the child was playing in the water, just a foot or so into the water, and the alligator came up,” Orange County Sheriff, Jerry Demings, told reporters.
“The father at some point struggled to try to get his son and was not successful and then alerted others to try and assist him in the process.”
The mother of the child also may have entered the lagoon in an attempt to rescue him, Sheriff Demings said.
The alligator was estimated to be between 4ft and 7ft long. The animals are common throughout Florida and have been known to grow to enormous sizes.
A 50-strong search party, including an alligator tracker, sonar, marine units and helicopters have been searching through the night in a bid to find the child.
"We're going to hope for the best in these circumstances," Sheriff Demings said, but said they were prepared for “challenging” times ahead.
Disney spokeswoman Jacquee Wahaler said everyone at the resort was devastated by what happened and Disney is helping the family. When asked if Disney was aware of alligators on the property, Ms Wahaler said there were signs that said "no swimming."
There had been no other recent reports of similar alligator attacks on the lake, Ms Demings said, adding, "We have no record of this happening before."
The incident comes two days after a gunman killed 49 people at a gay nightclub nearby in Orlando in the worst mass murder in modern US history.
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