The body was found in Kirkcaldy on Thursday afternoon close to where 17-year-old Libbi Toledo was last seen 10 days previously.
The death is being treated as “unexplained”.
Libbi’s devastated mother Judi Toledo had been due to address the media at a press conference at Kirkcaldy police station when it was called off at the last minute due to a “significant development” in the case.
A large section of the Smeaton area of the town was then cordoned off by police as the body was recovered.
Efforts appeared to be concentrated on land formerly occupied by Noble’s Auto Salvage, which closed down several years ago, and police tape was put up on Denburn Road and Smeaton Road.
A lane which runs alongside the yard from Hayfield Road to Smeaton Road was also cordoned off.
A Police Scotland spokesperson said: “Police in Fife can confirm that a body has sadly been found during the search for missing teenager, Libbi Toledo, in Kirkcaldy.
“Officers discovered the body of a female within a disused scrapyard at the junction of Denburn Road and Smeaton Road around 2.20pm on Thursday 21 September.
“Formal identification is yet to take place.
“The death is currently being treated as unexplained pending further enquiries and report will be submitted to the Procurator Fiscal.”
Concern had been growing for the welfare of Libbi, described as vulnerable with mental health problems, ADHD and autism.
Libbi, 17, was last seen at 1pm on Monday September 11 in the Smeaton area of Kirkcaldy.
She lived at an assisted living facility in the town, although she had recently been staying with her mother in Brechin three days a week.
Her father Joe lives in the United States.