Sources in the region told the BBC that 2,000 rebels had overrun the base. Fifty AU soldiers are still missing.
The casualties were the most serious losses suffered by the AU mission since it arrived in 2003, a spokesman said.
The attackers made off with all the weapons and vehicles they were able to take, and burned the vehicles that remained, the sources told the BBC.
Mission to Sudan
The attack came as South African Archbishop Desmond Tutu was expected in Sudan, in the latest initiative to bring peace to Darfur.
The archbishop is leading a delegation that includes former UN special envoy to Iraq, Lakhdar Brahimi, US ex-President Jimmy Carter, and Graca Machel, a children's rights advocate and the wife of Nelson Mandela.
The group of retired elder statesmen came together at Mr Mandela's invitation to find ways to tackle some of the world's toughest problems, such as HIV-Aids, poverty and conflict."
Jimmy Carter being there means two things. The situation is so out of hand they'll grasp at any straw, and with him pleading for everyone to just get along and row the boat ashore there won't be single positive step taken to defeat the rebels. AIDS was natures latest attempt to rid the savannas of homo sapien because africa is nothing if not wild and wild means predation. And there comes a time to cut your loses and say enough; the only thing that will save Africa is a massive invasion conducted at a level thrice the size of Operation Dessert Storm.
As a start. The piddling drop-in-the-bucket help from the United Nations is ludicrous, and is intended to be nothing more than a mummers farce to show the world how it is really really trying.
Africa desperately needs to be broken then reassembled. But it is not in any country's best interest to participate because there simply is no up side to spending billions upon billions of dollars just to see it pissed down the drain by savages.