The 42-year-old tram driver has been arrested on suspicion of manslaughter and is in police custody. Transport police said they were investigating whether he fell asleep, Xinhua news agency reported.
The Rail Accident Investigation Branch (RAIB) said the tram was travelling at a "significantly higher speed than is permitted".
The train, travelling from New Addington to Wimbledon, derailed at a sharp curve with a 20 kph speed limit as it was approaching a junction.
Deputy Chief Constable Adrian Hanstock said: "This is a tragic incident and our hearts and thoughts go out to all those affected. When officers arrived on scene this morning, they were met with a complex and challenging situation."
British Transport Police officers are continuing to work at the scene of a major incident in Croydon.
Wednesday's accident was the greatest loss of life in a British rail accident since seven people were killed and 76 were injured when a high-speed train from London came off the tracks at Potters Bar station in 2002.