Thirteen women and 24 men were killed in the accident on a steep and winding road near Genting Highlands resort, police officials said.
The toll could rise as some of the injured were in critical condition, officials said.
The nationalities of the victims could not immediately be ascertained though media reports said most of the passengers were Malaysians and some were believed to be from the Middle East.
Officials said a Thai man and a Bangladeshi man were among the injured.
The accident occurred when the bus carrying 53 passengers tumbled into a 200-foot ravine while going from Genting Highlands to Kuala Lumpur. The bus was heading downhill when the driver lost control on a bend, officials said.
Genting Highlands, about an hour's drive out of Kuala Lumpur, has a sprawling hotel, amusement park and a casino. It is a popular destination for almost all tourists visiting Malaysia.