The bus was carrying about 65 passengers when it lost control while driving down a slope, then crashed and overturned at a traffic circle in the suburban Sai Kung district, acting police superintendent Ho Chak-kan told reporters at the scene.
The bus driver was arrested for dangerous driving causing death, Ho said. The bus was supposed to carry a maximum of only 55 people, Ho added.
"We're still investigating the cause of the accident. We will look at whether it was due to speeding or whether there was anything wrong with the parts of the bus," Ho said.
Ho said the bus was carrying members of a religious group to a gathering in the suburban district. Ho said all the victims who died were women.
Footage from Hong Kong Cable TV showed most passengers were elderly and covered with blood. The broadcast also quoted the driver as saying the brakes were not working when the accident happened.
Hong Kong leader Donald Tsang said it was the city's most serious traffic accident in recent years.