The doomed bus, travelling from capital Tehran to the southern city of Kerman, hit a fuel tanker from behind at a highway near the city of Badroud at around 23:30 local time on Monday night.
The bus burst into flames upon impact after a rollover in the opposite lane, causing deaths of 21 people aboard. At least 21 other passengers have been injured and hospitalized.
Initial reports blame the bus driver for careless driving.