MEXICO CITY (AP) _ A freight train derailed and plunged into a busy highway south of the capital Tuesday, crushing buses and cars, smashing buildings and killing at least 25 people while injuring dozens more, authorities said.

One rescue worker said 50 people may have died.

Freight cars churned up the highway, crushing at least two buses full of people, Red Cross spokesman Rene Lezama said.

The accident occurred around noon about a mile outside the town of Tehuacan, 152 miles southeast of Mexico City in Puebla state, the Federal Highway Police said.

The train, heavily loaded with cement and sorghum, jumped the tracks at a curve near an elementary school and plowed into traffic, said Lt. Susana Garcia Hernandez. She said at least 18 freight cars and 14 vehicles were destroyed.

Herbe Ponciano Mokul, a federal district attorney, told reporters 21 bodies were recovered by early evening and four injured people died at the Tehuacan Social Security Hospital.

Dr. Alberto Salazar Garibay, director of internal medicine at the hospital, said 36 injured were being treated there.

Rescuers were still removing victims from the wreckage at nightfall. Soldiers, state and local police were sent to help.

Lezama said by telephone from Tehuacan that some injured were dying shortly after arriving at hospitals in neighboring towns.

Careening freight cars smashed into four roadside buildings at the town entrance and then damaged a dance hall, a restaurant and a car repair shop, the government news agency Notimex said.

Railway investigators at the scene told reporters they suspected engine brake failure was to blame. Such accidents are frequent on the antiquated, run-down Mexican railroad network.

Red Cross volunteer Miguel Angel Gonzalez, who estimated that up to 50 may have died, said, ''It's a rough, rough one. Our people and other rescue crews are still pulling victims out of the wreckage.''

The Red Cross called in ambulances from as far away as Mexico City to help carry the injured.

The highway is part of a network of secondary federal roads linking rural communities in the state.

Tehuacan is a picturesque community known best for its bottled mineral water.