The bomber was also killed in the attack on Istiklal Caddesi street, governor Vasip Sahin was quoted by local media as saying, but it was not immediately clear whether the assailant was included among the four victims.
Istiklal Caddesi, a pedestrian street usually thronged with shoppers and strollers on the weekend.
The police had sealed off part of the street, which adjoins Taksim Square in the European part of the city.
Several ambulances were at the scene, television images showed.
Turkey, which has been rocked by five major bombings since July, had been on high alert for further attacks ahead of Kurdish New Year celebrations on Monday.
The blast in Istanbul comes six days after a suicide car bombing in the capital Ankara which killed 35 people.
The attack was claimed by Kurdish rebels.
Turkey has also repeatedly been targeted by the Islamic State jihadist group in recent months.