Witnesses described hearing the screams of passengers as the two trams smashed into each other at the St Stephen’s Green stop.
In the most serious accident involving the Luas since it began operating, two children aged two and three were treated for minor injuries after they were showered with falling glass from the smashed windows. A woman was also treated for slight injuries.
A tram driver was taken to hospital where he was treated for shock.
Three ambulances arrived at the scene where paramedics treated those with minor injuries.
Gardaí are investigating the crash, as are operators Connex and Railway Procurement Agency (RPA).
The scene, which was littered with glass, was cordoned off for some hours yesterday evening.
The collision happened as the tracks cross yards from the tram stop. The probe will centre on whether it was an electrical, mechanical or driver error.
A witness said the outgoing tram derailed after the crash. The incoming tram had almost completed passing the crossing when the outgoing tram collided with the rear end.
Both trams were damaged in the accident.
Paul Barrett, who was on the tram, said the impact felt very much like being in a bumper car. Mr Barrett was dozing off but was startled awake by the loud bang. He could hear children screaming as the glass came in and those standing were knocked back.
“One man fell on top of me,” said Mr Barrett, who had never been on the Luas before yesterday. “I heard babies crying and saw the glass coming in.”
Dermot Nealon was beside the outgoing tram at the time of the accident. The scene was typical of a Friday at rush hour on St Stephen’s Green, which was packed with hundreds of pedestrians.
He remembers seeing a woman with a child stepping on to the front carriage before the tram pulled out. When they got on, they were trying to get the child to sit down.
Then came the huge bang and scraping as the two trams smashed into each other. “The kids were screaming and shouting. Others looked shocked as the windows smashed,” said Mr Nealon.
The tram went off the track and went skidding along the road for some yards, he said.
RPA spokesman Tom Manning said staff from his agency and from operators Connex will investigate, but that it was premature to speculate about the cause.
Eamon O’Modhrain, from Connex, said: “It’s unfortunate but Connex can only apologise to the people who got injured.”
Superintendent Tom Conway confirmed two children aged two and three suffered minor injuries and that the driver suffered shock.