All but two of the dead were children, aged around four to eight, said a senior security official in Assiut, near the site. One woman and the bus driver also died, he added.
The bus was broken in half by the force of the crash. Blood was spattered on the front of the engine and school bags and text books, some bloodstained, were strewn around.
Witnesses said barriers at the rail crossing were open when the train hit the bus. Transport Minister Mohamed Rashad and the head of the railways authority resigned, and President Mohamed Mursi said those responsible would be held to account.
Egypt's roads and railways have a poor safety record and Egyptians have long complained that successive governments have failed to enforce even basic safeguards, leading to a string of deadly crashes.
State media reported that as well as 50 dead, 15 or more people were injured. A medical source said as many as 28 were injured, 27 of them children.
"They told us the barriers were open when the bus crossed the tracks and the train collided with it," said Mohamed Samir, a doctor at Assiut hospital where the injured were taken, citing witness accounts.
Assiut Governor Yahya Keshk also said the crossing was open. "The crossing worker was asleep. He has been detained," he told state television.
SCENE OF MUTILATION
The doctor said the bodies of many of those killed were severely mutilated, illustrating the force of the crash, which took place in the city of Manfalut, near Assiut, about 300 km (190 miles) south of the capital.
"I saw the train collide with the bus and push it about 1 km (half a mile) along the track," said Ahmed Youssef, a driver.
Officials said the level of destruction and mutilation made it difficult to count and identify the bodies.
President Mursi ordered his ministers to offer support to the families of those killed, the official news agency said. Prime Minister Hisham Kandil ordered investigations into anyone responsible for the crash and travelled to the scene.
Victims' families protested at the crash site, the state news agency reported. Officials sought to reassure them the case would be investigated and they would receive help, it said.
Earlier this month, at least three Egyptians were killed and more than 30 injured in a train crash in Fayoum, another city south of Cairo. In July, 15 people were injured in Giza, close to the capital, when a train derailed.
Egypt's worst train disaster was in 2002 when a fire ripped through seven carriages of an overcrowded passenger train, killing at least 360 people.
Many more have been killed in rail accidents since then despite pledges from successive governments to improve safety. Accidents involving multiple deaths are also common on Egypt's poor road network.