The group has released a statement online claiming the attack.
A truck bomb ripped through a market in a Shiite-majority area of north Baghdad on Thursda, security and medical officials said.
A refrigerator truck packed with explosives blew up inside Jamila market at around 6am (03:00 GMT)," police officer Muhsin al-Saedi said, Al Jazeera reported.
Iraq has witnessed an upsurge in instability with the government struggling to contend with the ISIS group. The group overran large parts of Iraq in June 2014 and also holds significant territory in neighbouring Syria.
Iraqi security forces and armed groups are fighting ISIS in Anbar province, the sprawling Sunni heartland in western Iraq.