The explosion happened by the shrine of Lal Shahbaz Qalandar in the town of Sehwan, in Sindh province.
The number of casualties is unclear at this stage.
Television station Samaa initially reported more than 50 people were injured, while Geo TV put the figure at 20.
Medical facilities near the blast site are said to be insufficient to handle large-scale casualties.
Those that can are two hours’ drive away in Jamshoro and Hyderabad.
The attack is the latest in a string of blasts in Pakistan this week.
At least seven people were killed on Wednesday and several more injured in two separate suicide bombings in the country’s north-west.
In the first, six people died when two bombers targeted a government compound in the Mohmand tribal region.
A driver died in the second attack, when a bomber on a motorbike rammed a government van carrying four judges in the city of Peshawar.
On Monday, a suicide bombing in the eastern city of Lahore killed at least 13 people and wounded more than 100.
A faction of the Pakistani Taliban, Jamaat-ur-Ahrar, said it had carried out that attack, as well as two gun assaults in Karachi on 12 February.