IS conflict: Car bombing at Baghdad market kills dozens
At least 87 others were wounded in the blast, in the Shia Muslim district of Sadr City during the morning rush hour.
So-called Islamic State (IS) said it had carried out the attack.
The Sunni Muslim group, which controls swathes of northern and western Iraq, has frequently targeted Shia, whom it considers heretics.
Many of the victims included women and children, Iraqi police and medical sources said. Several of the injured were said to be in critical condition.
The blast damaged nearby buildings and other vehicles.
In an online statement, IS said it targeted Shia militiamen.
An eyewitness told the Associated Press news agency that the car bomb was a pickup truck loaded with fruit and vegetables.
Its driver parked the vehicle and quickly disappeared among the crowd, he said.
"It was such a thunderous explosion that jolted the ground," Karim Salih, 45, told the news agency.
"The force of the explosion threw me for meters and I lost conscious for a few minutes," he added.
IS has frequently targeted commercial areas and government and security personnel, causing heavy casualties.
Iraqi forces, backed by US-led coalition air strikes and Shia-dominated paramilitary forces, have regained some territory seized by IS in 2014, but have been unable to prevent bomb attacks in the capital.
In February, Iraqi security forces began building a wall around Baghdad in an effort to prevent attacks, following a series of bombings which caused carnage.
Source: bbc.com