The attackers initially set off firecrackers as a distraction before triggering the car bomb in the city of Pattani, said Pramote Prom-in, a military spokesman.
The blast occurred outside one of Thailand's Big C shopping centers, a major grocery and retail chain. Footage of the scene aired on Thai television stations showed a huge black plume of smoke rising skyward from the blackened building.
Muslim separatists have waged a bloody insurgency for years in Thailand's three southernmost provinces, the only ones with Muslim majorities in the predominantly Buddhist country. More than 6,500 people have been killed since 2004.