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The explosive material was planted in the Friday Market (Juma Bazar) near an imambargah, a Shia religious place, in Aurakzai tribal district’s Kalaya area outside.
At least 25 people were killed while more than 35 others injured, Geo news quoted district administration officials as saying.
Officials said that most of the victims were minority Shia Muslims.
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An emergency has been declared in the region’s hospitals to handle the situation.
Khyber Pakhtunkhwa police are on high alert following the Orakzai blast and a separate attack on the Chinese Consulate in Karachi on Friday morning.
“Our enemies are not happy with peace in the province,” provincial Chief Minister Mehmood Khan said after the attack.