Members of the Keirunga Park Railway rushed to the scene as screaming toddlers were carried off a bridge by injured adults.
Limping parents were escorted to ambulances with crying children in their arms.
The train - a locomotive visiting the club - was righted to avoid the possibility of the boiler exploding, said Havelock North Live Steamers president Brian Murphy. The injured people were taken to a room at the train station about 50m away where they were assessed by St John Ambulance officers.
Murphy said the day's constant drizzle had strengthened at the time of the crash.
"We were just making the decision whether or not to keep running," he said.
Club members were heard at the scene saying the driver had braked at the bend by putting the engine into reverse.
The driver was sitting on the first coal carriage and there were four open passenger carriages.
Murphy said he did not know if parents were holding children at the time. "We normally have a practice that everyone sits on seats," he said.
Four trains can operate on the track at any one time, he said. Keirunga Park Railway president Kevin West initially said no one had been injured so badly they needed hospital treatment. He said the train on the 846m track was approaching the bridge when it came off.
"This one came off on the corner by the bridge and someone knocked their knuckles - it's probably more damage to the engine than anything."
The club had more than 10 locomotives, many transported to the grounds in custom-made trailers. Labour Weekend is an open event, with visiting trains arriving from all over the North Island.
Police said people hearing of the incident could be put off going to the park. "You don't want to freak parents out or else they'll never take their kids there," a constable said.
Murphy said it was the first incident with injury in the club's 30-year history.
