The 40m-long grave is in the mountainous countryside near the town of Zvornik, which remained in the Serb-controlled part of Bosnia, about 80km northeast of Sarajevo.
“So far we have found 364 complete and 121 incomplete skeletons," said Ismet Music, a member of the Bosnian Muslim commission for missing people on Thursday.
Judging by the clothing found after eight weeks of digging, the dead were all civilians, believed to have been killed by Bosnian Serb forces during the war, said Music.
“In one corner of the grave we found 11 skeletons of children aged between 18 months and 12 years, as well as the remains of 12 women," he said.
Bosnian Serbs backed by the former Yugoslav People's Army (JNA) seized mainly Muslim Zvornik in 1992 and victimised its non-Serb residents.
Exhumation is to continue during the next two weeks and experts expect to find between 70 and 100 more bodies, said Music.
Identity documents found in the mass grave show that at least some of the victims were Muslim civilians from Zvornik and the nearby towns of Vlasenica and Bratunac, executed when Bosnian Serb forces captured them at the start of the war.
The grave is also believed to contain the remains of some of the 7000 Muslim men and boys massacred after Serb forces overran the United Nations “safe haven" of Srebrenica in July 1995.
Since the end of the war Bosnia has been made up of two semi-independent entities- the Serbs' Republika Srpska (RS) and the Muslim-Croat Federation.