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Police superintendant Kashif Zulfiqar told Al Jazeera more than 30 people were also wounded.
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| Peshawar school attack survivor recounts his story |
"The blast was really loud ... the windows of the buildings nearby were shattered," witness Usama Hussein told Al Jazeera over the phone.
"The roof of the bus was completely blown off by the bomb, I saw many dead bodies and severely injured people being rushed to the hospital."
The attack was the latest in Peshawar, which has been plagued by bombings and gun assaults by the Pakistani Taliban.
No group immediately claimed responsibility for Wednesday's attack.
A suicide bomber killed 13 people on March 8 after blowing himself up outside a court in Charsadda, in Khyber-Pakhtunkhwa province, about 30km from Peshawar.
Pakistan has fought homegrown fighters since 2004 when the Taliban, displaced by the 2001 US-led invasion of Afghanistan, began a campaign in border tribal areas.