A number of carriage were derailed by the accident in the coastal city of Alexandria.
Reports said one of the trains had been brought to a halt after a malfunction. Transport Minister Hisham Arafat blamed "human error".
Deadly train accidents in Egypt are rare but not unheard of.
The trains, one travelling from the capital Cairo and the other from Port Said, crashed at about 14:15 local time (12:15 GMT).
One resident, Hoda, was standing on her rooftop when she saw the trains crash.
"They rose in the air forming a pyramid when they collided. I started to scream from the rooftops for people to grab some sheets and run," she said.
President Abdel Fattah al-Sisi ordered an investigation into the accident, and the government promised financial compensation to the families of the victims.
The accident is likely to trigger fresh anger over the mismanagement and poor conditions of the country's transport system, BBC's Arab affairs editor Sebastian Usher reports.
In 2013, dozens of people were killed and when a train crashed into a minibus and other vehicles south of Cairo.
Egypt's deadliest rail accident occurred near the capital in 2002, when a fire ripped through a crowded train killing more than 370 people.