Islamic State says it carried out the attack as reports suggest at least 63 people have been killed and 78 injured in the blast.
A car bomb has exploded at a busy market in Baghdad, killing dozens of people.
Reports suggested at least 63 people had died - and at least 78 others were wounded in the blast.
Police said the vehicle exploded on Wednesday morning in a predominantly Shiite area of Baghdad's eastern district of Sadr City, during rush hour.
The explosion set nearby shops and market stalls on fire, as a crowd of angry residents and investigators gathered at the scene and around the charred remains of the car.
A beauty salon and adjacent barber shop were among the buildings caught in the blast, and the many victims were said to include brides and grooms getting ready for their weddings.
One witness said: "Young people want to live in this market. Security forces are unable to control security.
"They (the government) say that they have metal detectors to detect explosives. I wonder where such detectors are? How can such car bombs go though checkpoints?''
Islamic State, which considers Shiite Muslims as heretics, claimed responsibility for the attack in an online statement.
Iraqi officials denied the group's claim that the assault was carried out by a suicide bomber it named as Abu Sulaiman al-Ansari.
Earlier this month, at least 18 Shia Muslim pilgrims were killed and 45 others injured by an IS car bomb in the Saydiyah neighbourhood of the Iraqi capital.
The attack also comes just days after the Pentagon announced that asenior Islamic State leader in Iraq's Anbar province had been killed by a US airstrike.
The strike targeted a vehicle carrying Abu Wahib - military emir for Anbar province and a former member of al Qaeda in Iraq.
Three other IS members were also killed in the strike, near the town of Rutba.
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