The eight-carriage train crashed into a falling construction vehicle over the tracks at the mouth of the tunnel.
Rescuers fought heavily damaged vehicles inside the tunnel in search of survivors, some of whom escaped and broke windows.
The train from the capital Taipei to Taitung was transporting people traveling on long weekly annual holidays.
Lots of people could stand because the train is too full.
The 408 train is the fastest to deploy on a network that is generally considered safe. It can reach speeds of 130km / h (80mph).
Friday’s accident was the deadliest rail disaster in Taiwan in decades. President Sosai Ing-wen expressed his condolences to the families of the victims and ordered an investigation.
In the last report of the National Fire Service, it was stated that there were 494 passengers, 50 dead and 66 injured on the train and taken to the hospital.
The accident occurred around 09:00 (09:00 GMT) local time.
While some people behind the train were left undamaged, 100 people were rescued from the first four vehicles. Most of the dead, wounded and trapped were in the four tunnels inside the tunnel.
A woman who survived the UDN in Taiwan suddenly had a violent thrust and I felt like I was lying on the ground. We broke the window to reach the roof of the train.
Another woman who was rescued: My whole body fell to the ground. I banged my head and it started bleeding.
The 50-year-old survivor told Apple Daily that many were stuck under their seats and saw bodies everywhere when he got out of his car.
According to local media reports, the train driver was also among the dead.
The images show a large yellow flatbed truck standing at the edge of the runway. A construction project is underway near the northern end of the tunnel.
It is not known how the car fell under the embankment.
Other pictures show people walking the runway with their belongings as they are taken out of less affected cars.
Survivors were transported on neck stretchers.
Taiwan Prime Minister Su Tseng-chang visited the crash site on Friday afternoon.
UK Foreign Secretary Dominic RAB said on Twitter:
Taiwan has an impressive transport network with over a thousand kilometers of rail. Trains carry more than 200 million passengers each year.
Accidents are rare, but this most recent derailment – if it’s actually caused by a construction vehicle derailed on a nearby slope – will contribute to the last few incidents accused of negligence and / or human error.
It is believed that many on the train will celebrate the grave clearing festival – a time when people visit graves of family members to show respect to the dead, decorate them, and sacrifice their souls.
The island’s worst accident in recent history occurred in 1991, when two trains collided, killing 30 people and injuring 112 people.