Children who left for school in the morning returned to find their clay and cement houses in the village of Haldummulla, 190 km (120 miles) inland from the capital Colombo, had been buried.
Disaster Management Minister Mahinda Amaraweera said 75 children had escaped the disaster in an area famous for its tea plantations because they were in school.
"We are not sure about the others. But we are trying our best to rescue them," Amaraweera told media.
The Disaster Management Center said 10 bodies had been found so far, at least 300 people were missing and 150 houses buried in the village, which lies in hilly country to the south of a popular national park. One official said hopes were fading for the missing.