The attack took place at a federal government college in the Nigerian state of Kebbi on Thursday.
Atiku Aboki, a resident who went to the school shortly after the gunfire stopped, said he saw a scene of panic and confusion as people searched for their children.
"When we got there we saw students crying, teachers crying, everyone is sympathising with people," he told Reuters.
"Everyone was confused. Then my brother called me (to say) that his two children have not been seen and (we) don’t know if they are among the kidnapped."
Usman Aliyu, a teacher at the school, said the gunmen took more than 80 students, most of them girls.
"They killed one of the (police officers), broke through the gate and went straight to the students’ classes," he said.
Kebbi State police spokesman Nafiu Abubakar confirmed gunmen killed one officer during an exchange and also shot a student, who was undergoing medical treatment.
Abubakar said security forces were searching a nearby forest for the abducted students and teachers.
The attack is the third mass kidnapping in three weeks in northwest Nigeria.
The worst incident this year occurred at the Government Girls Secondary School Jangebe in February, when 279 girls were abducted and later released.
Bandits seeking ransom have kidnapped more than 800 Nigerian students from their schools since December in a series of raids.
Some have been freed while others remain missing.
Additional reporting by Reuters