An Islamic school in Sydney's southwest has been targeted by a man wielding a knife.

Police are searching for the man who entered Al-Faisal College in Minto just after 2pm on Thursday, asked if it was a "Muslim school" and threatened a female teacher and student with a knife.

Primary school students hid under their desks while those from the high school were gathered in a prayer hall as the school went into lockdown, one mother told AAP.

The mother, who did not wish to be named, said she was greeted by a swarm of police when arriving to pick up her children.

"I am still pretty much in shock," the mother told AAP.

"I am keeping my younger two [children] home tomorrow, one doesn't want to go back there."

Although most schools are on holidays, classes finish on Friday and students get an extra week's holidays later in the year, she said.

Mariam Veiszadeh, spokesperson for Islamophobia Register Australia, said parents were left distressed.

"[They] arrived at the school earlier today and found it surrounded by police officers and the SWAT team," Ms Veiszadeh said in a statement.

Police say the man was last seen in Kitson Road, Minto.

Officers searched the area but couldn't find the man, described as being an obese 20 to 25-year-old of Pacific Islander appearance.

He was wearing brown khaki pants and a green shirt.