Some locals spotted the severed head near a religious place around 5.30 am and alerted police, a senior police official said.
The deceased was identified as P Ramesh, aged about 25, who worked as a driver, Nalgonda Deputy Superintendent of Police S Sudhakar told PTI over phone.
"Since last evening his family members hadn't seen Ramesh," he said.
While police have registered a case of murder, sniffer dogs are being used to find the rest of the body, a police official said.