The bombing took place in town of Hangu, located just outside the lawless tribal regions bordering Afghanistan.
At least 26 people were killed and 56 were wounded, officials said. Most of the victims were civilians, including many in a nearby restaurant. Around 900 pounds (400 kilograms) of explosives were used, said Masood Afridi, a high-ranking police official.
Several government buildings including the district commissioner's office, for the most, escaped the blast. But, many shops and other structures nearby were damaged.
The Pakistani Taliban claimed responsibility for the attack. The devastation is likely to add criticism of the government, already under fire over the unilateral US operation that killed the al-Qaeda chief and the mounting bloodshed since.