Twenty-eight people were injured, some critically, after shots were fired at the Mahogany Masterpiece Dance Studio in the city of Dadeville on Saturday.
High school senior Phil Dowdell, a star athlete, has been named by local media as one of the victims.
President Joe Biden renewed his calls for tougher gun laws after the incident.
“What has our nation come to when children cannot attend a birthday party without fear?” Mr Biden asked, in a statement released by the White House on Sunday.
This shooting takes the US to a grim milestone of more than 160 mass shootings – in which four or more people are shot – so far this year, according to the Gun Violence Archive.
With a population of about 3,200 people, Dadeville is a small, rural city that is not used to scenes of violence on this scale.
What is striking right now, and unusual, is how little we know about a possible suspect.
Next to no details have emerged about how the shooting was brought to an end, or whether a suspect has died or is in custody.
This shooting takes the US to a grim milestone of more than 160 mass shootings – in which four or more people are shot – so far this year, according to the Gun Violence Archive.
With a population of about 3,200 people, Dadeville is a small, rural city that is not used to scenes of violence on this scale.
What is striking right now, and unusual, is how little we know about a possible suspect.
Next to no details have emerged about how the shooting was brought to an end, or whether a suspect has died or is in custody.
At a local parking lot where a vigil was being held, teenagers could be seen visibly shaking and crying from the shock of what happened last night.
Many shared hugs and tears as they tried to comfort one another.
One woman at the vigil, Shondra, told the BBC her cousin was at the birthday party last night.
“They were being free, they were celebrating a life,” she said.
“You never think it’s going to happen in your area.”
Keenan Cooper, the DJ at the birthday party in the dance studio, told reporters he tried to help get guests under tables when it started, but it was too dark to see where and who the shots were coming from.
He said the party was for Phil Dowdell’s sister, as earlier reported by local outlet the Montgomery Advertiser.
The area around the dance studio remains cordoned off.
As the town woke to the news on Sunday, Alabama’s state governor Kay Ivey said: “This morning, I grieve with the people of Dadeville and my fellow Alabamians.
“Violent crime has no place in our state, and we are staying closely updated by law enforcement as details emerge,” the governor added in a statement on Twitter.
Alabama is a state known for protecting the right of citizens to own guns, and the Republican governor’s message of condolence has been met with criticism on social media by those advocating for gun law reform.
Ivey is a strong supporter of second amendment rights – the right to keep and bear arms – and last year signed legislation ending a requirement to obtain a permit to carry a concealed handgun in public.
Her candidacy for last year’s governor election was endorsed by the National Rifle Association.
The incident in Tallapoosa County, in the east of Alabama, follows a shooting on the same day at a park in Louisville, Kentucky, which killed two people and injured four others.
In his own statement, Mr. Biden said the nation was “once again grieving” and described the rise in shootings as “outrageous and unacceptable“.
He said the American people wanted lawmakers to act on “common sense gun safety reforms“.
