The train lay on its side trapped among branches after rolling down a steep embankment.
A US soldier who witnessed the incident told the BBC that the accident was “just awful – suddenly the train overturned”.
Emergency services were working on a major operation, according to police, and the rail line between Munich and Garmisch-Partenkirchen was closed off completely.
The cause of the accident, which happened at around 13:15 local time (11:15 GMT), remains unclear.
An investigation has been launched by police and prosecutors. As of yet, no information has been given on the identities of the dead or whether the driver was among the casualties.
Since June 1, regional trains in Germany have seen higher passenger numbers after a low-cost ticket was introduced allowing nationwide travel for just €9.