Around 1,000 emergency workers and 30 vehicles were sent to the site, the emergency management bureau in the city of Xining said.
The collapse on Monday afternoon left 16 people needing hospital treatment.
The bureau said the bus had been raised from the collapsed 80-square metre (860-square foot) section into which it had fallen.
Security camera footage posted online and by Chinese broadcaster CCTV showed the bus tipped halfway into the chasm that had opened up at a bus stop just outside a health clinic.
Light and smoke were coming to the surface, possibly as a result of the rupture of gas or electricity lines.
Workers using backhoes, dump trucks and other equipment excavated earth around the collapse.
The hilly city of Xining is the capital of Qinghai province, one of China's poorest regions that lies atop the Tibetan Plateau.