Mazar-i-Sharif, an important commercial center near the border with Uzbekistan, has generally been spared the violence unleashed by insurgent groups battling the NATO-backed government in Kabul.
The attack on Tuesday was carried out by a suicide bomber, said police commander Baba Jan.
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"The bomber detonated his explosives in the main market and all the victims are civilians," he said.
The Ministry of Interior, however, reported that a bomb had been hidden in a cart.
In February, three people were killed in an attack on a bus carrying military personnel not far from Mazar-i-Sharif, and in January, militants attacked the Indian consulate in the city.
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