A senior medical officer at a private hospital said at least eight people died and 22 were wounded.
An Interior Ministry spokesman said an investigation team was at the blast site to help the wounded and assess casualties.
Video footage posted online showed ambulances rushing to the scene, which is also near bus stations.
The attack came ahead of Ashura, a commemoration of the martyrdom of Hussein, a grandson of the Prophet Muhammad, which is marked mainly by Shi’ite Muslims.
On Friday, at least eight people were killed and 18 injured in a blast in Kabul carried out by Islamic State.
The Sunni Muslim Taliban authorities, who took over Afghanistan in August last year after a two-decade insurgency, have said they will provide more protection for Shi’ite mosques and other facilities.
Sayed Kazum Hojat, a Shi’ite religious scholar in Kabul, said the Taliban government had ramped up security ahead of Ashura but should improve vigilance.
No up-to-date census data exists, but estimates put the size of the Shi’ite community at between 10-20% of the population of 39 million, including Persian-speaking Tajiks and Pashtuns as well as Hazaras.