At least 15 people have died and around 18 others injured when Lisbon's Gloria funicular railway car, which is popular with tourists, derailed and crashed, an emergency medical service spokesman told reporters.
Authorities did not identify the victims or disclose their nationalities, but said some foreign nationals were among the dead. Five people were gravely injured, the spokesperson said.
"It's a tragic day for our city ... Lisbon is in mourning, it is a tragic, tragic incident," Lisbon's Mayor Carlos Moedas told reporters.
Footage from the site showed the yellow tram-like funicular, which carries people up and down a steep hillside in the Portuguese capital, destroyed, and emergency workers pulling people out of the wreckage.
Portugal's government declared a day of national mourning.
Watch: Emergency services at scene of funicular crash in Lisbon
Police investigators are inspecting the site and the prosecutor general's office said it would open a formal investigation, as is customary in public transport incidents.
President Marcelo Rebelo de Sousa lamented the incident in a statement, expressing hope that authorities would soon establish what had caused the crash.
Tánaiste Simon Harris said the Irish embassy in the city is ready to provide assistance.
In a statement, Mr Harris said: "I am deeply saddened by reports of a tragic incident in Lisbon today. This is a terrible day for the city and my thoughts, and those of people across Ireland, are with the families of people who have lost their lives."
The line, which opened in 1885, connects Lisbon's city centre near the Restauradores Square with the Bairro Alto (Upper Quarter), famous for its vibrant nightlife.
It is one of three funicular lines operated by the municipal public transport company Carris and is used by tourists as well as local residents.
Its two cars are attached to opposite ends of a haulage cable with traction provided by electric motors on the two cars.
The car at the bottom of the line was apparently undamaged, but user-generated video footage aired by CNN Portugal showed it jolting violently when the other one derailed and several passengers jumping out of its windows and people shouting.
Portugal, and Lisbon in particular, have experienced a tourism boom in the past decade, with visitors cramming the popular downtown area in the summer months.
