The blast was quickly claimed by Al-Nusra Front in Lebanon, a group believed to be linked to Al-Qaeda's Syrian arm, which said it was a suicide attack.
"Four people are dead, and there are 35 injured," Red Cross spokesman Ayad al-Monzer told AFP.
The official National News Agency said the attack appeared to be a suicide bombing.
"Body parts apparently belonging to a suicide bomber were at the scene," it said.
"With the help of God almighty we have responded to the massacres carried out by the party of Iran (Hezbollah)... With a martyrdom operation in their backyard in the southern (Beirut) suburbs," it said.
The blast took place on the busy Al-Arid Street in the Haret Hreik neighbourhood, which had been targeted by a suicide car bombing in early January.
An AFP photographer saw troops and Hezbollah security men deployed as firemen worked to put out the flames and health workers took the injured to hospitals.
It is the third to hit the group's strongholds in a month.
Less than a week ago, a car bomb exploded in Hermel in the eastern Bekaa valley, killing three people. That attack was also claimed by Al-Nusra Front in Lebanon.
And on January 2, a suicide car bombing claimed by the jihadist Islamic State of Iraq and the Levant (ISIL) hit the street targeted on Tuesday, killing five people.
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