There were no immediate reports of injuries but services in and out of London Euston are facing “major disruption”.
Fire and ambulance services are at the scene at the Hunton Bridge Tunnel.
A spokesman for London Midland told the Press Association: “There is a train derailment at Watford Junction – it is the 6.19 service from Milton Keynes to London Euston.
“It happened near the tunnels at Watford Junction station – there are no reports of any injuries.”
The disruption is expected to last throughout the morning.