The toll had initially been put at about 30 but the number rose as rescuers continued to find bodies at the difficult-to-access crash site in Santa Catarina state, government spokesman Cladio Thomas said.
Three children who had been rescued died later at a nearby hospital, Thomas said, noting the toll could rise still further.
The tour bus plunged 400 meters (1,300 feet) into a ravine filled with thick vegetation as night fell, complicating search efforts.
Fifty people were supposed to be on the bus, but authorities believed the number of passengers was higher than that.
Witnesses told local press that the driver lost control on the curvy stretch of highway, but the cause was still under investigation.
"There are people out there, on the hill, in the bus, trapped in the wreckage. But the chances of finding someone alive are pretty slim," state police Colonel Nelson Coelho said in a statement.
Several drivers stopped on the roadside to try to help victims as they waited for emergency services to arrive.
Accidents on this winding road are common. The O Estado newspaper said 66 people had been killed on the highway in the last five years.
Some 43,000 Brazilians are killed in road accidents annually.
And from 2002-2012, the traffic accident rate surged by over 24 percent.
With the economy growing and the population topping 200 million, an estimated 10,000 new cars are added to the roads every day.
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