The car bomb went off near the main gate of the imambargah in the central bazar of Parachinar, Kurram Agency.
At least 22 people were killed and 95 others injured in the car bomb blast, hospital authorities said.
The condition of the majority of those injured was stated to be critical. Of those critically wounded, 27 were airlifted to Peshawar hospitals. Scores of vehicles were also damaged in the blast.
Security forces cordoned off the area while emergency services were dispatched to the site. The administration has declared an emergency at all hospitals in the area.
An Army medical evacuation helicopter has also been flown to Parachinar for evacuation of the injured, an Inter-Services Public Relations (ISPR) statement said.
Prime Minister Nawaz Sharif expressed grief over the blast and condemned the attack. "It is our responsibility to continue the war against terrorists," he said.
Sharif reiterated his government's resolve to eliminate the menace of terrorism from the country at all costs.
The Prime Minister directed the relevant authorities to extend all possible assistance to the local administration.
Interior Minister Chaudhry Nisar ordered an inquiry into the blast.
Pakistan has been rocked by a slew of terror attacks that have claimed scores of lives.
A wave of suicide attacks across Pakistan last month, including one in Lahore and another on the Lal Shahbaz Qalandar shrine in Sindh, killed more than 125 people and wounded over 300 others.
Pakistan army also launched a nationwide military operation 'Radd-ul-Fasaad' to eliminate terrorists and consolidate gains of its counter-terrorism operations.
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