The blaze broke out late Friday at the Mae Surin camp in Mae Hong Son province, injuring dozens of people and reducing hundreds of makeshift houses to ashes.
Rescue operations went on for hours at the remote mountainous camp area, and those who lost shelters have been temporarily housed in tents, Mae Hong Son provincial governor Narumol Paravat told AFP by telephone.
"The latest death toll we can confirm through military walkie-talkies is 42," Paravat told AFP, adding the toll was likely to rise further as rescue workers search the area. Authorities believe the fire was sparked by an unattended cooking flame.
Majority of the victims were women, elderly people and children.
Fire is believed to have sparked from a cooking flame in one of the houses and spread quickly across to the bamboo-thatched roofs, aided by hot weather and strong winds, a local district official said. Authorities have ordered an investigation into the incident.
"I regret this incident and too many people died," Interior Minister Jarupong Ruaengsuwan told AFP. "The casualties should not be so high. I will investigate the cause of the fire."
Roughly 400 houses in the camp were fully burnt down.
Mae Hong Son province in Thai-Myanmar border has about 10 camps flooded with Myanmar refugees who have fled the country since 1980s. About 130,000 refugees - mostly from Myanmar’s Karen minority - are housed in the bamboo-thatched dwellings. Mae Surin camp houses about 3,700 refugees who fled from Myanmar following ethnic conflict between the Karen guerrillas and the government.
The Thai-government had earlier announced it wanted to close down the refugee camps following a ceasefire agreement between the Karen guerrillas and the civilian government that replaced the military junta, which ruled Myanmar for decades.
Hundreds of homes were destroyed at a Um-Piam border refugee camp Feb. 24, last year, by an alleged similar cooking fire accident.