The attack ahead of the country's elections set for May 11 killed Fakhrul Islam, 46, a member of the Muttahida Qaumi Movement in the city of Hyderabad.
The News International reported Islam was attacked by gunmen on motorcycles, who later fled.
The Tehrik-i-Taliban Pakistan later claimed responsibility, warning of more such attacks.
The civilian coalition government, led by President Asif Ali Zardari's Pakistan People's Party, for the first time in Pakistan's history completed its full five-year term last month. Pakistanis are preparing to pick their next government in the May 11 elections, an important milestone that would mark the first such democratic power transition in a country that has been intermittently under military rule for decades since independence in 1947.
The MQM had been a member of the Zardari coalition before it quit.
Pakistan's Nation newspaper said Islam's killing pointed to threats faced by MQM and other secular groups in the country, where deadly militant violence has claimed thousands of lives in recent years.
Other secular parties facing threats from the militants are the PPP and the Awami National Party.
The Wall Street Journal reported a lawmaker from the Awami National Party who is seeking re-election also was targeted in a bombing attempt in Peshawar Thursday but he escaped.
Islam, a grocery store owner, had been MQM's candidate for a Sindh provincial assembly seat, the Nation reported.
"He sustained four bullets in his head and abdomen and died on the spot," a police official was quoted as saying. Islam is survived by his widow, two sons and three daughters, the report said.
"We condemn this heinous crime and we demand that all the candidates should be provided better security by the government," said Qamar Mansoor, a leader of MQM, which has been speaking out strongly against the TTP, the Nation reported.
Pakistan's caretaker Prime Minister Mir Hazar Khan Khoso ordered authorities to step up security for all elections candidates.
The TTP, which is separate from the Taliban in Afghanistan, is close to al-Qaida.
TTP leader Hakimullah Mehsud, in a recent video, told Pakistanis to stay away from the elections, CNN reported.
"They are intended to divide Muslims, we want the implementation of Sharia [law] and for that jihad is necessary," Mehsud was quoted as saying.