Fifty children aged four to six years old and the driver of the school bus they were on were killed when their vehicle was hit by a train in central Egypt on Saturday, officials said.
The transport minister resigned in the wake of the crash near Manfalut, 350km (230 miles) south of Cairo.
The provincial governor said the man in charge of the crossing was asleep and had been arrested.
Egyptian roads and railways have a poor safety record.
An estimated 8,000 people die in car accidents each year in the country.
The head of the railway authority has also resigned.
Egyptian President Mohammed Mursi ordered his ministers to offer support to the families of those killed, the state news agency reported.
"They told us the barriers were open when the bus crossed the tracks and the train collided with it," doctor Mohamed Samir told the Reuters news agency, citing witness accounts.
An eyewitness said the train pushed the bus about 1km (half a mile) along the track.
More than a dozen people were also injured.
Distraught families searched for the remains of their loved ones along the tracks, the Associated Press reported.