The accident took place at Tehran-Qom highway Monday night, reports Xinhua.
Over 20,000 people died and 200,000 were wounded in traffic accidents in Iran
Mahmoud Mozaffar, chief of Iran Red Crescent Society, said two passenger buses moving in opposite direction collided and caught fire.
He said preliminary investigation showed a tire of one of the buses coming from Kashan to Tehran blew up and the vehicle crossed the rail guards and collided with the bus travelling in the opposite direction from Tehran to Yazd.
"Unfortunately, in the accident over 40 people were killed and over 36 people were injured, who were transferred to the hospital," said Mozaffar.
Official figures show that more than 20,000 people died and 200,000 were wounded in traffic accidents in Iran each year.