The train was carrying people home for an Islamic festival
Most of those who died were burned to death when flames swept through the train on its way from the capital, Cairo, to Luxor.
Officials say the driver did not immediately realise the train was on fire and continued moving for seven kilometres (over four miles) before stopping at the town of al-Ayatt, 70km south of the capital.
The draught coming from the open windows would have fanned the flames, causing them to spread swiftly.
Passengers who tried to escape were trapped by bars on the train's windows.
Many of the bodies found had been badly charred.
Other victims died when they jumped from the moving train.
Egyptian Prime Minister Atef Obeid, who went to the scene of the fire, said the fierce blaze was caused by a passenger trying to heat food.
It was the worst rail disaster in the country's history.
The BBC's Paul Wood, reporting from the scene of the disaster, says security forces have been put on alert, in anticipation of an angry reaction from relatives of the victims.
Egyptian President Hosni Mubarak said he was "deeply saddened" by the disaster.
A statement read out on state television said Mr Mubarak "presents his condolences to the families of the victims and begs God to bring them assistance".
It said he had issued orders for a rapid investigation into the circumstances of the accident, and for assistance to be provided to the victims.
Crammed cars
Seven of the 11 carriages of the crowded train were gutted in the blaze.
The train was full of people returning to their homes in southern Egypt for the five-day Eid al-Adha festival, which celebrates the annual Hajj pilgrimage in Saudi Arabia.
Our correspondent says Egyptian trains are often filled beyond capacity and there have been terrible accidents in the past.
One survivor, speaking to the BBC, called it "a tunnel of death".
Witnesses said that when the fire broke out, the electricity went out and passengers, including dozens of children, were scrambling to escape in darkness.
The rail line linking Cairo with southern Egypt has been closed indefinitely.
Rescue efforts
Large numbers of police and firefighters were sent to the scene to pull victims out of the carriages.
Ambulances rushed dozens of injured people to three hospitals in the region.
Hours after the flames were extinguished, rescuers were still bringing out stretchers.
Villagers supplied blankets and food to the stranded passengers and mosques opened their doors to the rescued.
The dead are all believed to be Egyptians.