The explosive, probably a crude bomb, went off at around 5 PM behind the old Railway station in the busy Amolapatty area below an electric pole, district Superintendent of Police Rana Bhuyan told PTI.
14-year-old Purnima Rojok, who had been injured in the blast, succumbed to her wounds at the Assam Medical College Hospital. Seventeen others injured, some of them critically, have also been admitted to the hospital.
Preliminary investigations pointed to a crude bomb and not a grenade as no splinters were found at the site of the blast and also there was no trace of an improvised explosive device (IED), Bhuyan said.
The identity of the insurgent outfit responsible for the blast was not immediately known, the SP said.
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Both ULFA (Independent) and Maoist elements are known to be active in upper Assam.
Local people had reported to the police that two extremists had come on a motorcycle and hurled a grenade before fleeing.
Senior police officials went to the site, cordoned off the area and tightened security arrangements in the town.
Earlier on December 15, a grenade was exploded by suspected anti-talk NDFB (Songbijit) at Molandubi Market in Kokrajhar district killing one person and injuring four others.