Malala, 17, was shot in the head on a school bus by the Taliban in 2012 and won global acclaim for her passionate advocacy of women's right to education.
"I am heartbroken by this senseless and cold-blooded act of terror in Peshawar that is unfolding before us," Malala, who now lives in central England, said in a statement.
"Innocent children in their school have no place in horror such as this. I condemn these atrocious and cowardly acts and stand united with the government and armed forces of Pakistan whose efforts so far to address this horrific event are commendable."
A Taliban spokesman said the hard-line Islamist movement was responsible for Tuesday's attack when gunmen stormed the school in Peshawar, saying it was in response to a major army operation against the insurgents in the tribal areas.
"I, along with millions of others around the world, mourn these children, my brothers and sisters - but we will never be defeated," Malala said.