Dyfed-Powys Police said it responded to a “serious collision” on the A478 near the village of Llandissilio in Pembrokeshire on Monday morning.
The force said the male car driver - who has not been named - was declared dead the scene, while “a number of children” were taken to hospital with “minor injuries”.
The 636 bus had been taking children to Ysgol y Preseli, a secondary school in Crymych, when it crashed around nine miles away from its destination.
A police spokesperson said on Monday: “Dyfed-Powys Police is at the scene of a serious collision on the A478 near Llandissilio in Pembrokeshire.
“The incident was reported to police at 8.35am, and the ambulance and fire services also attended.
“The collision involved a motorcar and a bus carrying school children.
“Sadly the driver of the motor car died at the scene. Next of kin have been advised and are being supported by specialist officers.
“A number of children received minor injuries with two taken to hospital by ambulance with what are described as minor injuries.
“The road is currently closed while investigations continue.”
The Welsh Ambulance Service told WalesOnline that three people were taken to hospital as a result.
“We were called at approximately 8.39am this morning to reports of a road traffic collision involving a bus and car near Efailwen. We responded with four emergency ambulances, one rapid response vehicle and our Emergency Medical Retrieval and Transfer Service in the Wales Air Ambulance,” a spokesperson said.
“Three patients were conveyed to hospital – two to Glangwili Hospital in Carmarthen and one to Withybush Hospital in Haverfordwest.”
Pembrokeshire Council said in a statement that “13 young people were hurt but none are thought to have suffered serious injuries”.
They later added that “all parents and guardians of young people who were travelling on [the] bus at the time of the collision are understood to have been contacted”.
The A478 was closed and traffic diverted as parents picked up their children from the scene. The road remains shut according to Pembrokeshire Council.
A council helpline for the parents and guardians of children travelling on the bus has been set up on 01437 775400.