An explosion killed at least 35 people and wounded dozens in a crowded market in the Sadr City neighborhood of Baghdad on Monday, police and hospital sources said.
The state news agency said an explosive device had been detonated.
Women and children were among the dead and some shops had burnt down, a police source said. More than 50 people were wounded.
There was no immediate claim of responsibility.
Hospital sources told Reuters the death toll could rise as some of the wounded were in critical condition.
Iraq's Security Media Cell said an investigation had been launched.
It was the third time an explosion has hit Sadr, the mainly Shi'ite Muslim neighborhood of Baghdad, in recent months, with the last one in June wounding 11 people.
A suicide attack claimed by Islamic State militants killed at least 32 people in a Baghdad market in January.
Large bomb attacks, once an almost daily occurrence in the Iraqi capital, have halted in recent years since Islamic State fighters were defeated in 2017, part of an overall improvement in security that has brought normal life back to Baghdad.