Chakkrote Nongmanee, a Thai police lieutenant who inspected the site, said: "One of the soldiers was beheaded. His head was found 50 metres away from the scene of the attack."
The army was investigating reports that the convoy was also hit by a roadside bomb, he said.
Chakkrote said the initial investigation showed that about 20 suspected separatists were hiding behind a bush along the roadside.
Police found 10 weapons left in the area, including eight M16 assault rifles, a submachine gun and a pistol, he said.
'No escalation'
Surayud Chulanont, the Thai prime minister, said Monday's incident was a routine ambush with an unusually high number of victims.
"This kind of clash can happen any time. It is not a serious escalation" of the conflict, he said.
"Authorities will have to investigate and not allow it to happen again."
The attack was the deadliest incident in the region since June 2007, when seven soldiers were killed in a similar ambush of a security team protecting teachers.
The ambush came about one hour after a roadside bomb targeted another convoy of eight soldiers protecting teachers in neighbouring Yala province, local police said.
Decades of conflict
The southern part of Thailand was an autonomous Malay Muslim sultanate until Buddhist Thailand annexed it in 1902, provoking decades of animosity towards the state.
More than 90 per cent of Thailand's 65 million people are Buddhist, and many of the country's Muslims have long complained of being treated as second-class citizens.
More than 2,800 people have been killed since fighting began in January 2004.
Attacks have grown increasingly brutal in recent months, with victims beheaded, mutilated and even crucified in what analysts say is an attempt to spark a backlash and create divisions between Buddhists and Muslims.