People have been told they will not be allowed out of the theme park until they can show a negative test.
It comes after Shanghai reported 10 locally transmitted cases on Saturday.
China's controversial zero-Covid policy has already seen millions of people repeatedly locked down, sometimes in unusual locations.
The sudden nature lockdowns have seen people fleeing shops - including a Shanghai branch of Swedish furniture giant Ikea - and workplaces as they try to avoid being trapped inside.
However, those awaiting their freedom at Shanghai Disney can console themselves with one positive: rides are continuing to operate for those trapped inside The Happiest Place on Earth.
As well as the theme park, surrounding areas such as the shopping street were also abruptly closed shortly after 11:30 local time (3:30 GMT).
Videos posted on Chinese social media site Weibo showed people rushing to the park's gates following the announcement but finding them already locked.
Posting on Chinese social media site WeChat, the Shanghai government said the park was barring people from entering and those inside could only leave once they had returned a negative test result.
It added that anyone who has visited the park since Thursday must provide three negative test results over three consecutive days.
No date has been given for when the park will reopen. Shanghai Disney said tickets will be valid for six months and refunds will be given.
The snap closure comes just two days after the park began operating at a reduced capacity to comply with Covid measures.
It's not the first time the park has unexpectedly shut. Last November, 30,000 people were trapped inside after authorities ordered everyone to be tested as part of contact tracing.
Almost three years since China reported its first coronavirus case, authorities across the vast nation continue to impose abrupt and extreme measures in a bid to stop any transmission of the virus.
Millions of people are under 200 different lockdowns in China, as of October 24, as the country of 1.45 billion consistently records more than 1,000 new Covid cases a day. The numbers are seen as relatively small outbreaks in other parts of the world.
However, earlier this month Chinese President Xi Jinping signalled that there would be no easing up of the zero-Covid policy - which aims to wipe out all outbreaks - calling it a "people's war to stop the spread of the virus".
The Chinese government's insistence on the increasingly unpopular policy comes as the economy continues to take a hit as a result, with GDP falling by 2.6% in the three months to the end of June from the previous quarter.
-- Courtesy of BBC News