The aircraft, procured at an estimated cost of Rs 965 crore a piece along with five others, crashed an hour after taking off from Agra airbase for an exercise, officials said.
IAF ordered a court of inquiry to ascertain the cause of the mishap.
Those killed in the crash are the aircraft's Captain Wing Commander Prashant Joshi, Wing Commander Raji Nair, Squadron Leader Kaushik Mishra, Squadron Leader Ashish Yadav (Navigator) and Warrant Officer Krishnapal Singh (Flight Engineer), IAF officials said.
Senior IAF officials said two C-130J Super Hercules aircraft had taken off together while taking part in a tactical exercise, which involved flying at very low heights, at 10 AM but one of them crashed at around 11 AM.
IAF sources said the aircraft, fitted with four Rolls Royce engines, could not even communicate about the emergency before it lost contact with ground control.
The 'Black Box' of the aircraft has been recovered and is being analysed to assess the reason for the crash.