The flooding was so extensive that survivors were having difficulty finding dry ground to bury the dead, officials said.
Most Chittagong roads were under water on Tuesday while trains and flights to and from the city were suspended for a second day. Work at the port was also hampered.
Mukhlesur Rahman, the Chittagong's chief administrator, said: "This morning we resumed our operation with more than 1,000 police, troops, fire brigade officers and members of the civilian administration".
He said continuing rain was hampering the search, adding there was little hope of any survivors being pulled out from under the mud.
MA Matin, Bangladesh's communications minister, arrived in the city early on Tuesday by train to oversee the operation. Fakhruddin Ahmed, the interim government chief, was also due to arrive later on Tuesday.
Meteorological officials said the rain marked the onset of the annual monsoon season, which lasts until mid-September, but was unusually heavy because of the influence of a storm in the Bay of Bengal.
Elsewhere in the country, rain and flash floods killed at least 15 people, disaster management officials said.
Some rivers had swollen beyond danger levels, including the Khowai in northeastern Habiganj where bank erosion made hundreds of families homeless.
Millions living on the banks of other rivers were also threatened and the prospect for relief looked bleak with more rain forecast across the country, particularly in hardest-hit Chittagong and other hilly areas.
Large areas of the Bangladesh coastline have been submerged under 90-120 cm of water because of a moderate tidal surge triggered by the storm, officials said.