Police are treating the case as a murder, and an autopsy was being conducted Tuesday to learn more about the cause of death and the identity of the victim.
Parts of the nearly 20,000-acre (8,000-hectare) estate are open to the public, and the body was found in a forest at Anmer, a hamlet of several dozen people 115 miles (185 kilometers) northeast of London on the estate grounds.
Most of the senior royals were at the sprawling Sandringham estate, where the queen loves to celebrate Christmas with her husband, children and grandchildren. The royals New Year's celebration marked a milestone in the recovery of Prince Philip, the queen's 90-year-old husband, who made his first public appearance since recovering from a heart procedure over the Christmas holiday.
So far, there are more questions than answers about the strange discovery, which has shaken the normally quiet region where the queen and her family typically enjoy riding horses and holding shooting parties.
Buckingham Palace officials are keeping mum about the murder case, referring callers to the police, and police have released few details. It is not yet clear how old the victim was, how long her body had been in the woods, if she was murdered on the grounds or if her remains were put there.
"We are at the very early stages of the investigation and it could be a complex inquiry," Detective Chief Inspector Jes Fry said Tuesday. "The body had been there for some time."
Fry said authorities were examining missing person reports and unsolved cases around the country to see if there were any possible links.
"I cannot confirm whether she was clothed because, at the moment, only my staff, the person who found the body and the person or people who put it there know that and I would like it to stay that way," he said. "The body was found by a dog walker and was not underground. At this stage we do not know who the victim is."
The grisly find has further marred what had already been a difficult holiday season for the royal family. Their normal events were interrupted two days before Christmas when Philip suffered chest pains and had to be sent by helicopter to a Cambridge hospital for emergency treatment to clear a blocked coronary artery.
He was released in time to enjoy the New Year's Day church service at a chapel on the estate, which has served as a private residence for British monarchs since 1862.
Elizabeth and Philip remain in residence at Sandringham House, along with one of her sons, Prince Edward, and his wife Sophie.
The estate has two stud farms and a fruit farm and employs more than 100 full-time staff.