The authorities say the mass of water, mud and rock came without warning, burying the regional train as it passed through the alpine valley, the BBC's Bethany Bell reports from the scene.
The death toll had been put at 11, although this was later revised down to nine because of what provincial governor Luis Durnwalder said was a "counting error".
But he warned Ansa news agency that the toll was not final as "there could still be someone buried in the mud".
The train driver is understood to be among the dead. The most seriously injured have been taken by helicopter to nearby hospitals.
Rescuers dug frantically with shovels and pickaxes in at least one mud-filled carriage to try to reach the victims, Ansa reported.
Eyewitness Alex Rowbotham told the BBC: "The front of the train, the cab, is not there at all and the train is hanging off the rails about five metres from the river.
"It is now only a few trees that are holding up the train and preventing it falling into the river."
He said the train was on the other side of the Adige river to the main road, and it appeared as if rescuers were building a pontoon across the river to enable them to carry across necessary equipment.
Thomas Widmann, transport adviser to the Bolzano provincial government, told Sky Italia that the landslide appeared to have been caused by an irrigation pipe that burst, piling rocks, debris and water on to the oncoming train.
The railway line, inaugurated in 2005, is one of the most modern in the country, Ansa said.
It runs at the foot of an alpine valley with mountains towering up to 3,000m (9,850ft) above.
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