Pictures from the crash site showed a scene of carnage with bodies thrown from the mangled wreckage of the garment workers' van.
"A bus from Prey Nokor (Ho Chi Minh City) overtook a car and crashed into a van transporting 38 garment workers, killing 16 of them on the spot," Cheang Am, governor of eastern Svay Rieng province, told AFP by telephone.
He said 22 other workers were injured with eight in a critical condition.
Cambodia's roads are notoriously dangerous.
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Pav Sina, President of the Collective Union of Movement of Workers, said garment workers routinely travelled in overcrowded vehicles to save money.
"Every month cars transporting workers get into traffic accidents," he told AFP.
During a speech to graduate students, Prime Minister Hun Sen described the collision as a "big accident".
"I would like to share my condolences with the families of the victims," he said.
Svey Rieng is an eastern province on Cambodia's long border with Vietnam. The main road between Phnom Penh and Ho Chi Minh City runs through the centre of the province.
Disputes over wages, safety and conditions are frequent and sometimes turn violent.
The multi-billion dollar garment industry employs about 650,000 people in Cambodia and is a key source of foreign income for the impoverished country.