Authorities said the death toll could go higher as many of about 850 inmates and some prison officers were unaccounted for and some bodies were burned beyond recognition.
The prison population was at least double its approved capacity when the fire broke out Tuesday night. The number of prison personnel also remains unclear.
Recognizing many victims through DNA records was unlikely as the records were either incomplete or lost in the fire at the Comayagua prison in central Honduras.
Honduran media showed images of twisted metal beds and rows of charred bodies the prison grounds.
Director of Prisons Danilo Orellana told the Honduras Herald there was no evidence of a riot and the fire was caused either by an electrical short circuit or a mattress set alight by a prisoner.
Lobo ordered troops into Comayagua to enforce order and help arrest inmates believed to have escaped from the prison. He suspended the head of the prison and the director of prisons and made no immediate concessions to hundreds of distressed relatives of the prison inmates.
Lobo took power in a military-managed election after the June 2009 coup that toppled former President Jose Manuel Zelaya. His promise of peaceful reconciliation among deeply divided political groups remains unfulfilled.
Both the United States and European Union recognized Lobo's presidency on condition of substantial political reforms and a return to democratic rule but many Honduran critics of Lobo's administration have seen their dissent land them in trouble with the security agencies.
In April, the U.S. State Department published a report critical of conditions in the two dozen prisons in Honduras.
The country's prison commissioner said investigators would investigate into the cause of the fire.
This week's fire was the third major incident in Honduran prisons in recent years. In 2003, 61 prisoners were killed in a fire at a prison in La Ceiba. In 2004, a fire in a San Pedro Sula prison killed 107.
Setting fires and rioting is a commonplace occurrence in Honduras' overcrowded prisons, often not reported at all. It mirrors similar unrest in other Latin American countries where hundreds of inmates have died in prison fires.
In December 2010 rioting prisoners triggered a fire at the main prison in Santiago, Chile, leaving 81 dead.
A fire at Ilobasco's juvenile prison in El Salvador that year killed 16 inmates. The blaze was blamed on an electrical short circuit.