Police have confirmed two people are dead after the crash on Tuesday afternoon.
Emergency services were called to the scene of the crash at 2.55pm. Both vehicles were on fire.
All bus passengers were accounted for, but two unidentified passengers in the small car did not survive.
Police were asking any witnesses of the crash to provide information to Southern Police, including photographs and videos.
Te Anau Milford Highway is now partially open, and efforts will be made to fully reopen the route after the vehicles involved are recovered.