So far, no group has claimed responsibility for the attack, but the Pakistani Taliban, Tehrik-i-Taliban, has denied any involvement, CNN reported.
"We are targeting the government machinery and the law enforcement agencies but not general public," said Tehrik-i-Taliban spokesman Shaidullah Shaid.
A car carrying 440 pounds of explosives drove into the Qissa Khawani bazaar and exploded Sunday, CNN reported.
The blast destroyed at least 10 shops, several vehicles and left a huge crater in the ground, Shafqat Malik, chief of the bomb disposal unit, told CNN.
Alamzeb Khan, who was working at the bazaar, said the blast knocked him to the ground.
"When I got up, everything was on fire. Women and children were burning in [a] Suzuki pickup, and a number of vehicles were destroyed, besides the shops [that] were also on fire," Khan said.
The death toll is expected to rise, as most of the 100 injured were in critical condition, Dr. Arshad Javed, chief executive of Lady Reading Hospital in Peshawar, told CNN.