The device was found yesterday after the authorities searched a suspicious vehicle left in the car park of a police station on the island.
The "bomb was found hidden in a pick-up truck which was stolen a few months ago," Phuket Provincial Police Commander Ong-Art Piuruengnon told AFP by telephone.
"A bomb disposal team defused it and found that it was unable to explode," he added.
While bombings are common in Thailand's insurgency-plagued deep south near the border with Malaysia, it is believed to be the first time that a car bomb has been found in Phuket, which is popular with foreign tourists.
Muslim militants have waged a near-decade-long insurgency in Thailand's southernmost provinces but they are not known to have targeted Western tourists.
More than 20 people were wounded yesterday when a car bomb went off near a hotel in the southern province of Songkhla.
Shadowy insurgents have waged near-daily bomb and gun attacks, targeting security forces and civilians from both the Buddhist and Muslim communities in a conflict has left more than 5,700 people dead.
Thailand's tourist-friendly image as the "Land of Smiles" has been tested in recent years by political violence, devastating floods, deadly bus and boat accidents, and growing concerns about crimes against foreigners.
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