Those who left the port of Incheon on the South Korean mainland on board the ferry were hoping for a peaceful trip to the tourist island of Jeju, known as “South Korea’s Hawaii”.
It’s not known what caused the ship to capsize. One witness said there was a “loud impact and noise” before it started sinking.
Heavy overnight fog had caused many island services to be cancelled.
Survivors who were rescued said they feared for those who remained on board.
“There was an announcement telling us to sit tight on the ferry, but it was already sinking. Some of the students weren’t able to escape,” said one rescued male student. “I’m worried about those who stayed in rooms.”
Two people have been confirmed dead, but most survivors brought ashore so far are said to be well.
Some had taken to lifeboats, others had jumped into the water before being rescued.
Navy, coastguard and other ships as well as helicopters are involved in the operation.