The tour bus caught fire inside the Gudvanga tunnel, north east of Bergen in Norway, just after 1.20pm.
Witnesses reported seeing smoke billowing out of the tunnel and into the mountains.
Five people were taken to hospital and treated for minor injuries and more than 30 others had to be rescued from the tunnel.
"We have closed the tunnel on both sides. We are carrying out a search to ensure that there are no more people in the tunnel," Johann Mannsåker, who led the operation, told Swedish newspaper GT.
He said it was not immediately clear what had caused the fire in the tunnel, which is more than 11 kilometres long.
Paramedics close to the scene of the fire. Photo: Arne Veum/TT
According to Swedish tabloid Expressen, the driver of the bus was from Sweden.
Multiple reports in the Swedish media also suggested that the trip had been organised by Ellios Bus, a Swedish tour operator based in Gothenburg. But a statement on the company's website said that another bus company contracted by the firm had arranged the journey.
Witnesses speaking to Norwegian newspaper VG said that the passengers appeared to be on holiday from Asia.
A smaller bus, several cars, a truck and a caravan were also damaged by the fire, Expressen reported.
The E16 road remained closed on both sides of the tunnel late on Tuesday afternoon, said Norwegian state broadcaster NRK.