Officials in Karamay said the ban, which prohibits headscarves, partial face veils and burqas, would last until August 20 due to a local sports event.
Xinjiang, home to the Muslim Uighur minority, has seen an upsurge in violence in recent months.
Authorities have blamed Uygur separatists for the upsurge in violence.
In a report by the Karamay Daily which was carried by national media outlets, officials listed the "five types of people" who would be banned from public transport.
"Passengers who do not co-operate, particularly the 'five types of people', will be reported to the police," said the report, which added that all commuters would be subject to bag checks.
"The security measures will ensure social stability and protect the lives, property and safety of citizens of all races," said the report.
Karamay is a city about 400km north of Xinjaing's capital Urumqi, which was hit by deadly attacks in April and May at a railway station and a market.
China's state media said a group armed with knives and axes stormed a police station and government offices. It said 37 civilians and 59 attackers were killed.
Reports surfaced last month that some government departments in Xinjiang were banning Muslim staff from fasting during Ramzan.
Days after the Yarkant incident the imam of China's largest mosque, in the Xinjiang city of Kashgar, was stabbed and killed.
The imam, Jume Tahir, was said to be unpopular among Uygurs who disliked the fact that he praised the ruling Communist Party policies while preaching in his mosque.
Xinjiang which is restive over native Muslim Uygurs resentment over settlements of Hans is witnessing a number terrorist attacks in recent past.
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