Rescuers have been removing trapped passengers through emergency windows, and at least one person has been taken to hospital by air ambulance.
The City of Biloxi said on its Twitter feed: "Biloxi emergency workers enroute to Main and railway for collision between train and charter bus".
The accident happened in Biloxi, Mississippi at around 2.15pm local time.
The intersection has gates and a crossing light, authorities said.
NBC News reports the bus was traveling from Austin, Texas.
Biloxi Police Chief John Miller confirmed the fatalities in a press conference Tuesday afternoon.
Witnesses told the Sun Herald that the tour bus appeared to have become stuck on the train tracks for several minutes before the deadly crash.
Images from the scene show the bus, upright and still intact, straddling the tracks, with the CSX train pushed up against its left side. Some were trapped under the bus when the train it it, Robinson said.
The National Transportation Safety Board (NTSB) said it was aware of the crash and monitoring.