The PAF plane crashed in fields in Mandi Bahauddin district, 200 km from provincial capital Lahore, police officer Hanif Butt said.
He said both pilots, including a Wing Commander, were killed instantly.
The jet had taken off from Sargodha airbase for a routine training flight. The cause of the crash could not immediately be ascertained.
A PAF team reached the crash site and launched an investigation.