The collision occurred between Zakaria Express and Fareed Express. At least three carriages were damaged in the collision which, initial reports revealed, occurred due to faulty signals.
Witnesses described watching in horror as one train sped into the city's Quaidabad Railway Station and rammed into the second, which was parked there, with the roar of the crash swiftly followed by the screams of people trapped inside.
Officials said rescuers armed with metal-cutting equipment and heavy cranes had managed to pull all the passengers from the twisted wreckage.
At least 4 dead, 100 injured as Karachi-bound train crashes near Multan
"No-one is left inside," Ijaz Ahmad Khan, a Karachi administrative official, told reporters at the scene.
Dr Kaleem Shaikh, the senior medical officer at Jinnah Hospital, put the death toll at 21 with 65 wounded.
Up to 60 people had been injured in the crash, said Nasir Nazeer, an administrative official in Karachi. He said an inquiry has been launched into the cause of the accident.
A senior administration official in Karachi said there could be up to 1,000 passengers on board the trains when the accident occurred.
Factory worker Ajab Gul said he was on his way to work when the accident occurred. "Suddenly another train came speeding in and smashed into the parked train," he said, describing the sound of the crash as "huge". "There were clouds of dust and smog. After that we heard screams. People inside the collided trains were screaming and crying."
All train traffic between Karachi and the rest of the country suspended after the collision.
Bilawal Bhutto visits victims of train collision at Jinnah hospital
Pakistan Peoples Party (PPP) Chairperson Bilawal Bhutto Zardari visited the victims of the accident at Jinnah hospital on Thursday. "No one has control over such accidents but the government should ensure that all security measures to avoid such incidents in future."
Expressing grief over the loss of lives, Railway Minister Khawaja Saad Rafique said, "I am directly in contact with DS Railway, supervising the emergency activities. Really sad over loss of precious souls."
I am directly in contact with D.S RAILWAY, supervising the emergency activities. Really sad over loss of precious souls.
— Khawaja Saad Rafique (@KhSaad_Rafique) November 3, 2016
Received initial inquiry report of Train accident. Responsible will be punished.
— Khawaja Saad Rafique (@KhSaad_Rafique) November 3, 2016
Addressing the media, Rafique said the collision occurred due to the negligence of the driver and assistant driver of the train coming from behind. "The drivers first ignored the yellow signal and then the red signal." He announced a compensation of Rs1.5 million for the family of each killed and Rs0.3 million for the injured.
Prime Minister Nawaz Sharif also expressed grief over the incident.
Train accidents are common in Pakistan, which inherited thousands of kilometres of track and trains from former colonial power, Britain.
Train crash kills five in Pattoki
In September, at least four people were killed and more than 100 injured when two trains collided near Multan. The accident occurred when a Karachi-bound Awami Express passenger train rammed into a goods train which had stopped after running over a man crossing the railway track.
The railways have seen decades of decline due to corruption, mismanagement and lack of investment.
Last November, 19 people were killed in Balochistan after a train’s brakes failed and it sped down the side of a mountain.
In July 2015, at least 17 people were killed when a special military train fell into a canal after a bridge partially collapsed.
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