The children, aged between two and six, were playing with the hand grenade when it exploded outside the house in Hangu district, police said.
District Police officer Iftikhar Ahmed told Dawn newspaper the children belonged to the family of a villager in Babar Mela area near Orakzai Agency.
Officials said the children were playing with the toy-like bomb in a field and were playing with it when it exploded, killing five boys on the spot. One girl later died at the hospital.
The police official said the owner of the house is being searched for a possible terror link and an investigation into the incident is on.