The train was traveling from the northern town of Bijelo Polje to the port city of Bar when it derailed near Bioce, some 10 kilometers north of the regional capital Podgorica.
Witnesses said at least two cars packed with passengers rolled 30 meters down a ravine.
Police have cordoned off the area. Rescuers are having a difficult time reaching the train cars because of the rugged terrain and darkness.
Many wounded have been pulled out, according to the director of Podgorica's main hospital, Nebojsa Kavaric. He also said there were many dead bodies at the crash site.
Montenegro's Transport Minister Andrija Lompar said "there is a great probability that there are many dead."