The Montreal Maine & Atlantic freight train derailed and caught fire at about 1 a.m. Saturday. Some of the train's 73 cars exploded, and flames and billowing smoke could be seen for miles.
Quebec provincial police Lt. Michel Brunet confirmed that one person had died. He refused to say how many others might be dead, but said authorities have been told "many" people have been reported missing.
About 1,000 people in the town of Lac-Megantic were evacuated when the fire spread to a number of homes. Officials say the explosions and fire destroyed a large part of the town's downtown area.
Lac-Megantic, which is located about 155 miles east of Montreal, is home to about 6,000 people.
Bernard Demers, who owns a restaurant in the area, said the explosion was "like an atomic bomb. It was very hot. ... Everybody was afraid."
Firefighters and rescue workers from several neighboring municipalities, including Sherbrooke and Saint-Georges-de-Beauce, were called in to help deal with the disaster. Firefighters from northern Maine were also deployed to the Quebec town, according to the sheriff's office in Franklin County.
Environment Quebec spokesman Christian Blanchette said a large but undetermined amount of fuel had also spilled into the Chaudiere River. He added that a mobile laboratory had been set up to monitor the quality of the air.
The cause of the derailment was not immediately known.
The Associated Press contributed to this report.
