The bomb was left on a road in the Nahrawan area used by Shiite pilgrims who are walking to the shrine of Imam Musa Kadhim in northern Baghdad for annual commemorations.
Imam Musa Kadhim, the seventh of 12 imams revered in Shiite Islam, died in 799 AD. The commemoration has in recent years turned into a huge event that brings the Iraqi capital to a standstill for days.
There was no immediate claim of responsibility for the attack, but the Islamic State jihadist group frequently targets members of Iraq’s Shiite majority, whom it considers heretics.
Last year’s pilgrimage was also marred by attacks against worshippers that killed at least 13 people.
And four more were burned or shot to death when mobs torched houses and a Sunni religious endowment building after rumours of a suicide bomber sparked panic among a crowd of pilgrims.
IS overran large areas north and west of Baghdad in 2014, but Iraqi forces backed by US-led military assistance have since regained signficant ground.
The jihadists still control a large part of western Iraq, and are able to carry out frequent attacks against both civilians and security forces in government-held areas.