Morris County Prosecutor Robert Bianchi would not say how Rev. Ed Hinds, 61, was killed but said the body had wounds "consistent with a homicide."
No one has been arrested, and police said they would not discuss possible motives.
"Until a suspect is caught, people should be hypervigilant," Bianchi said.
"The fact is that this was a community leader whose arms were wide open to downtrodden," he said. "Maybe one of those individuals was involved. That kind of generosity is preyed upon."
Hinds, dressed in vestments, was found around 8 a.m. Friday in the kitchen of the rectory attached to St. Patrick's Church in the affluent Newark suburb of Chatham, a New York City bedroom community, after he didn't show up to preside over morning Mass.
Monsignor Kenneth Lasch, a retired priest who knew Hinds for four decades, told The Star-Ledger that he learned of the killing from parish workers who knew Hinds had left instructions for Lasch to deliver the eulogy in the event of his death.
"The parish called me and said they found him in the kitchen on the floor," Lasch told the newspaper. "He had his dog with him, and apparently he was making a cup of coffee."
He was last seen alive around 11 p.m. Thursday, following a safety seminar held by police at the church in which they fingerprinted and photographed young children.
Janet Gilmartin stood on the front porch of her single-family home across from the church as uniformed police officers searched through leaves in the gutter.
"It's frightening to think that the person who did this thing might have been running across the street this morning when my daughter was stepping outside to take my grandson to school," said Gilmartin, 69.
Roads and intersections around the church and its Catholic school were closed as authorities investigated.
"It makes absolutely no sense. He was certainly a very well-loved pastor," said Bishop Arthur Serratelli of the Roman Catholic Diocese of Paterson. "We ask that you please pray for him."
Theresa and Michael Marotta, who live down the street from the church, were trying to figure out what to tell their 10-year-old son, who attends the school.
"It's very shocking and very sad," Theresa Marotta, 44, said.
Michael Marotta, 47, described Hinds as a gentle and insightful yet quiet person.
"And he was a warm person," he said.
He had been at the parish since 2003. Born in Morristown, he attended high school there and college at Seton Hall University. He was ordained in 1974.
Following an early stint at St. Patrick's, he went on to become the vice chancellor of the Diocese of Paterson and secretary to the bishop from 1978 to 1985.
He previously was pastor of St. Michael Church in Netcong and Our Lady of Mount Carmel Church in Boonton.
Hinds' cousin Jeannette Miller said she was in shock.
"He was just a magnificent man," she said. "He had a wonderful life and was a wonderful priest, and everybody loved him."