The blaze started when a firecracker set off to celebrate a wedding set the vehicle's fuel tank alight.
Police said that several bodies were completely burned. Because shocked relatives have not yet given a full count of those aboard the bus, the number of fatalities could increase.
It is believed the bus may have been carrying as many as 70 passengers, including women and children. Five people were rescued from the blaze, and others may have escaped.
Friends of the groom were celebrating the marriage by setting off firecrackers in front of his house when one of the firecrackers fell under the bus carrying relatives and friends of the couple, setting alight its fuel tank.
The bride and the groom escaped harm as they were in another vehicle.
Police gave a toll of 35 late on Sunday, but Senior Superintendent Aamir Zulfikar said five more bodies had since
been pulled from the debris.
Some local newspapers have put the toll as high as 50.
Setting off firecrackers and sometimes firing guns into the air to celebrate weddings is a common custom in Pakistan, although authorities are trying to discourage it.
Zulfikar said Lahore police had stepped up efforts to enforce a ban on the making and selling of fireworks.