The attack took place on 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.
According to some reports, another attack hit the Nisantasi area of Istanbul some 15 minutes after the blast in Taksim, RT reported.
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.