FBI agent Steve Richardson said agents had gone in after negotiations with Jimmy Lee Dykes, 65, deteriorated.
Dykes had been keeping the boy, Ethan, in a storm shelter since last Tuesday after abducting him from a school bus and shooting dead the driver, BBC reports.
The 66-year-old bus driver’s funeral was held on Sunday.
Daryle Hendry, who lives about a quarter of a mile (0.4km) from the bunker, told the Associated Press he heard a boom followed by a gunshot on Monday afternoon.
Mr. Richardson said negotiations between officials and Dykes had deteriorated over the past 24 hours, and that the abductor had been seen holding a gun.
“We were certainly concerned for the safety of the child,” he said.
Fearing the child, Ethan, was in imminent danger, officials raided the bunker at 15:12 local time (21:12 GMT), he said.
A local law enforcement official told Reuters a stun or flash grenade was detonated as part of the operation to free him, but did not release other details.
It was unclear how Dykes had died. The child was said to have been unharmed and taken to hospital where he was reunited with his family.
“I have visited with Ethan. He is doing fine: he’s laughing, joking, playing, eating – the things that you would expect a normal 5-to-6-year-old to do,” the FBI agent told reporters.