Initial reports suggest the explosion ripped through a congested part of the city, and occurred as police and local officials cleared a route for a planned Shi'ite procession through the city's old town.
AP quoted a senior provincial police official who said Peshawar city police chief Malik Saab was among those killed.
Varying reports put the number of injured at around 30.
The Peshawar blast comes just one day after a suicide bomber killed a security guard who was blocking his entrance to a luxury hotel in the Pakistani capital, Islamabad.
Security forces are on high alert across Pakistan as Shi'ite Muslims carry out religious rites to mark the 7th-century martyrdom of Prophet Muhammad's grandson.
The tragedy coincides with a visit to Islamabad by new U.S. House of Representatives Speaker Nancy Pelosi (Democrat, California), who is in Pakistan in part to discuss cooperation to combat international terrorism.
Peshawar is the capital of Pakistan's tribally dominated North West Frontier Province, which borders Afghanistan. The city has a long history as a main trading center on the ancient Silk Road.
(AP, Reuters, AFP)