South Wales Fire Service confirmed the incident happened at 1100 GMT near the seaside resort of Porthcawl, Bridgend county.
South Wales Police said the crash location is near Kenfig nature reserve. A local councillor said some wreckage has been found in sand dunes.
One eyewitness told BBC Wales she saw two planes hit each other in the sky, then come down before an explosion.
Reena Callingham told the BBC news website: "I was in the garden putting the clothes on the line and I could hear a light aircraft. I looked up because I couldn't see it and thought to myself that it was high up. And then I could hear another one and I could see that one too and I thought to myself that I didn't realise they flew so close together. I watched them for a few minutes and then the second one just hit him. I just couldn't believe it. At first there wasn't an explosion straight away but then there was. They just went down. I couldn't speak and I rang the police. My heart is still beating so hard, it was a big shock. You can see smoke now but I don't know exactly where they are."
A local councillor Jeff Tildesley said the wreckage is in the sand dunes at Mawdlam. He said: "I am able to see some evidence of the aeroplane wreckage surrounded by police vehicles, we have heard the pilot jumped out. We are hearing there is one fatality but that is unconfirmed, I am only able to see the wreckage of one plane. I am on the wall of St Mary Magdalene church. There are lots of vehicles here and police have set up a diversion, I am able to see further in the distance where there is one ambulances and two fire engines, I can hear the sirens."
A South Wales Police spokesman said: "We received reports shortly before 11am today that two light aircraft had landed in the vicinity near Kenfig nature reserve, Porthcawl. Officers are attending at the scene. Inquiries are ongoing to establish what has taken place. No further information is available at this stage."
Emergency service are on the scene including Porthcawl and Port Talbot coastguard teams as well as the coastguard helicopter and RAF rescue helicopters. The Central Beacons mountain rescue team have also been called to help.
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