Police, medical workers and volunteers pulled bodies from the wreckage of the locomotive that plunged down a 100 metre ravine.
Authorities fear the death toll could rise as emergency workers continue to reach victims.
It’s estimated 200 passengers were believed to be aboard the train when it crashed 15 kilometres north-east of the capital Podgorica.
Among the injured were 75 children, many returning home from a skiing holiday in the north.
"I had fallen asleep when a loud noise woke me," 60-year-old Stanislava Bukovic told news agency AP as she was being carried away in a stretcher.
"Then I felt something hit my head and lost consciousness. The next thing I knew I was on this stretcher," the injured passenger said.
Brake failure
Interior Minister Jusuf Kalomperovic said initial reports suggest the train's brakes failed.
"The accident occurred because of a failure of the train's braking system," Mr Kalamperovic told a news conference.
Montenegro’s medical services issued an appeal for blood donors.
Crowds of onlookers and worried relatives gathered outside the main hospital in the capital as ambulances brought the injured in for treatment.
Montenegro’s worst train accident
Montenegrin President Filip Vujanovic visited the scene of the accident and called it a "catastrophe".
Deputy Prime Minister Miroslav Ivanisevic described it as "the worst rail accident in the history of Montenegro".
The republic's transport minister Andrija Lompar, has reportedly resigned because of the accident.
A three day mourning period has been announced for the victims.