Published on Monday, 19 March 2012 10:36 Written by BBC News
At least two people were also injured in the attack outside the Ozar Hatorah school in the north-east of the city.
Police say there are similarities with the killings of three soldiers in two separate incidents the same part of France last week.
All three - of North African origin - were shot by a man on a scooter.
A paratrooper out of uniform was gunned down in a residential area of Toulouse just over a week ago, while two soldiers were killed and a third wounded as they used a cashpoint in the town of Montauban, some 29 miles (46km) away, on Thursday.
President Nicolas Sarkozy, his education minister and interior minister are travelling to Toulouse, in south-west France, following the school attack.
The grand rabbi of France, Gilles Bernheim, who is also on his way to the city, said he was "horrified" and "stunned" by what had happened.
Israel also said it was horrified, adding that it trusted the French authorities "to shed full light on this tragedy and bring the perpetrators to justice".
'Shot at everything'
Monday's attack happened as children and their parents were arriving at the Ozar Hatorah school, in the Joliment area of the city, for the start of the school day.
The Toulouse-based La Depeche newspaper said the shooting took place at the drop-off point for the nursery- and primary-age children of the school.
It said the killer was armed with two weapons, one of which was the same calibre weapon as that fired in the attack on the paratroopers in Montauban.
"He shot at everything he could see, children and adults, and some children were chased into the school," local prosecutor Michel Valet told journalists, adding that three children were among four dead, with one seriously wounded.
A school teacher is widely reported to have been killed. The AFP news agency says the dead children were aged 10, six and three.
A freelance journalist in Toulouse, Christopher Bockman, told the BBC the city was in lockdown as police hunt the killer.
Some 60 police officers, including anti-terrorist specialists, had already been drafted in to help investigate the attacks on the soldiers.
They had been looking for a gunman who was targeting soldiers, the BBC's Christian Fraser in Paris says.
But if the latest attack does prove to be linked, then it suggests the pattern has changed and, if so, police are looking for a dangerous serial killer, our correspondent adds.
Credit: BBC News