The assailant fired through the school's chapel windows at students sitting in pews and then took his own life, officials said.
The children killed were eight years old and 10 years old, they said.
"This was a deliberate act of violence against innocent children and other people worshipping. The sheer cruelty and cowardice of firing into a church full of children is absolutely incomprehensible," Minneapolis police chief Brian O'Hara told reporters.
FBI Director Kash Patel said the case was being investigated as an act of domestic terrorism and a hate crime targeting Catholics.
Patel identified the attacker as Robin Westman, who public records show to be a 23-year-old resident of the area.
Court records show Westman's name was changed from Robert Westman in 2020 on the grounds that they identified as female.
The shooting at Annunciation Catholic School, a private primary school with about 390 students, was the 146th such incident since January, according to the K-12 School Shooting Database.
The steady drumbeat of shootings has prompted new safety measures and provided grist for ongoing debates about gun laws.
"Don't just say this is about thoughts and prayers right now. These kids were literally praying. It was the first week of school. They were in a church," a visibly angry Minneapolis mayor Jacob Frey said at a news conference.
Officials said the shooter fired dozens of rounds using a rifle, a shotgun and a pistol.
At least two of the chapel doors had been barricaded from the outside using wooden planks, O'Hara said.
Local hospitals said they were treating 14 children and two adults, with many suffering gunshot wounds.
All were expected to survive, O'Hara said
Fifth grader Weston Halsne told CBS News his friend was hit by a bullet while trying to protect him.
"The shots were like, right next to me," Halsne said.
"I think I got like gunpowder on my neck."
Public records showed Westman's mother, Mary Westman, had worked as an administrative assistant at Annunciation Church.
Law enforcement officials said they were examining an online manifesto posted by Westman that has since been taken down.
Online videos reviewed by Reuters show notes in which the shooter discusses feelings of depression and a desire to carry out a mass shooting.
Names of previous school shooters are scrawled on a rifle magazine, along with a series of erratic and wide-ranging political complaints.
US President Donald Trump ordered the US flag to be flown at half-staff across the country as a sign of mourning.
Authorities said the attack did not appear to be related to three other shootings over the past 24 hours in Minneapolis, including one at a Jesuit high school.
Minnesota as a whole has a gun death rate below the US average, according to Everytown for Gun Safety, a gun violence prevention group.
