The blast in the Shaab area of northern Baghdad struck an area where minibuses gather near a market.
There was no immediate claim for the blast, but the Islamic State (IS) jihadist group, which frequently targets members of Iraq's Shiite majority, has said it was behind multiple car bombings in Baghdad in recent weeks.
The city is hit by near-daily bombings and shootings that kill hundreds of people each month.
Security forces, despite being deployed at checkpoints and other positions across Baghdad, are consistently unable to prevent such attacks.
They are now backed by US-led air strikes targeting the jihadists in both Iraq and neighbouring Syria, and also supported by international advisers.