Regional police said in a tweet (in German) that four people were dead and about 100 injured, of whom 15 were in a critical condition and 40 seriously hurt.
"This is the biggest accident we have had in years in this region and we have many emergency doctors, ambulances and helicopters on the scene," another police spokesman, Stefan Sonntag, told the Associated Press news agency.
Regional train company Meridian said in a statement that "a tragic accident" had occurred on a single-track route between Rosenheim and Holzkirchen at about 07:00 local time (06:00 GMT).Bernd Rosenbach, managing director of Bayerische Oberlandbahn which operates Meridian trains, told reporters: "The accident is a huge shock for us. We are doing everything we can to help the travellers, relatives and workers."
Technical manager Fabian Amini added: "Our thanks go to the emergency services and workers who gave their help so quickly."
Other fatal German train crashes
January 2011: 10 killed in Saxony-Anhalt when commuter train collides with goods train after driver runs through two signals
February 2000: Nine dead when overnight train from Amsterdam to Basel crashes near Cologne
June 1998: 101 killed when a high-speed train with a broken wheel derails and smashes into a bridge at Eschede in Lower Saxony
The scene of the crash is close to the Mangfall river in a hilly and densely wooded region.
Although the trains were carrying commuters, local carnival holidays meant no schoolchildren were on board, according to reports.
The cause of the collision is not yet known.
Roads around the scene have been closed and the railway line between Holzkirchen and Rosenheim is blocked, local media reported.