The city’s funicular railways – Glória, Lavra, Bica and Graça – are a popular tourist attraction and known for their yellow tram-like vehicles.
Officials said a cable along the railway’s route snapped, but the rest of the mechanism was functioning properly.
The brakeman tried to apply emergency brakes but failed to prevent the derailment,
The cause of the crash remains unknown.
Nationals of Portugal, South Korea, Switzerland, Canada, France, Britain, Ukraine and the US are among the dead, according to police.