The incident was the worst to hit Central Sulawesi since warring factions signed a peace agreement in December to end two years of violence between Muslims and Christians.
The blast occurred Wednesday afternoon on a bus carrying some two dozen people to Poso, about 1,000 miles northeast of Jakarta.
Police officials in Poso said they had not determined who was behind the blast. Several survivors reportedly told police it occurred just after three unidentified people disembarked from the vehicle. Investigators were trying to trace them.
The country's police chief, Gen. Da'i Bachtiar, who was visiting the island of Lombok, urged local residents to stay calm.
"The explosion of the commuter bus constituted a provocative attempt by those who don't want to see the society in Central Sulawesi living quietly and peacefully," he told the official Antara news agency.
Local residents said the bomb sparked fresh tension in and around Poso. Local media reported unrest has risen recently in the area after a series of homemade bombs exploded last week. No one was injured, but a number of shops were destroyed.
Two years of sectarian violence fueled by the presence of the militant Islamic group Laskar Jihad have left between 500 and 1,000 people dead and forced thousands of others to flee the region. Roughly equal numbers of Muslims and Christians live in Poso.
Indonesia, the world's largest Muslim country, has been wracked by social and sectarian violence since former President Suharto was forced to resign in May 1998 after 30 years in power. According to official figures, thousands have died and nearly a million others have been displaced.
Nearly 85 percent of Indonesia, a secular state, is Muslim.
Celebrity Couples of 2014 [PHOTOS]