Yemeni authorities have blamed IS for the Friday attack on the refuge for the elderly operated by Mother Teresa's Missionaries of Charity in main southern city Aden.
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"According to our information, the extremists who attacked the elderly care home in Aden have kidnapped priest Tom Uzhunnalil, a 56-year-old Indian, who was taken to an unknown location," a Yemeni security official told AFP.
"We are aware that no group has yet claimed the criminal attack but information points to the involvement of Daesh," said the source, who asked to remain anonymous, using an Arabic acronym for IS.
Gunmen stormed the refuge killing a Yemeni guard before tying up and shooting 15 other employees, officials said.
Four foreign nuns working as nurses were among those killed.
The Vatican missionary news agency Fides identified the nuns as two Rwandans, a Kenyan and an Indian, adding that the mother superior managed to hide and survive while an Indian priest was missing.
The internationally recognised government in war-torn Yemen is grappling with both an Iran-backed rebellion and a growing jihadist presence.
The Vatican's Secretary of State Pietro Parolin has said Pope Francis "was shocked and profoundly saddened" to learn of "this act of senseless and diabolical violence."
Al-Qaeda and IS have stepped up attacks in Aden, targeting mainly loyalists and members of a Saudi-led coalition battling Huthi rebels and their allies since March last year.
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