The explosion ripped through the "Tableeghi Markaz" in Bashirabad area of Peshawar district when worshippers were offering evening prayers, police officials said.
Seven persons, including two children, were killed instantly. Rescue workers said children were also among the injured.
The condition of 10 injured was decribed as critical by the Khyber-Pakhtunkhwa health minister.
Hundreds of people were present at the centre run by a Sunni group at the time of the blast.
Bomb Disposal Squad chief Shafqat Malik said an estimated 5 kg of explosives hidden in a ghee container was used in the attack.
Police and a bomb disposal squad rushed to the site and started a search and clearance operation. An emergency was declared in hospitals across Peshawar.
Jamiat Ulema-e-Islam spokesman Maulana Jalil Jan said the bomb ripped through the worshippers. The centre was sealed from four sides and the people inside were asked to leave.
This is not the first time such a gathering has been attacked in the northwest. A previous blast targeted people at a Tableeghi Jamaat centre in Swat, an erstwhile stronghold of the Pakistani Taliban.
Prime Minister Nawaz Sharif and provincial Chief Minister Pervez Khattak condemned the blast.
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