Police said the bus was rented for a group of residents from Chiang Mai's Saraphi district who were returning home after making merit at Wat Ban Wang Mai Charoen Temple in Wang Nuea in Lampang.
The bus, belonging to Weerapan Tour and Travel Company, fell into a ravine near Pan Thong waterfall in Wang Nuea district.
Police said the road was steep slope downhill and curve and the bus had problem with the brakes and the driver was unfamiliar with the route.
The bus rammed through a roadside guardrail and plunged into a 30-metre-deep ravine before hitting a large tree.
At least 23 of the 38 passengers were killed while a dozen others were injured, including the bus driver who was also sent to hospital.