Most of those killed were on the bus, which was gutted by flames, but several people gathered around a nearby food stall were also killed, police said. A hospital official said at least 37 people were injured.
Police said the attacker waited until the bus was slowly pulling away from the station, then jumped on board to avoid security checks. Police said the death toll was especially high because the blast triggered secondary explosions in gas cylinders stored at the food stall.
The blast occurred a week before national elections, and officials had warned of a surge in violence ahead of the balloting.
Several other explosions rumbled through the heart of the capital Thursday morning, including one that struck an American convoy and killed a U.S. soldier, the military said. The latest death raised the number of U.S. service members who have died since the Iraq war started in March 2003 to at least 2,131, according to an Associated Press count.
In other developments:
Witnesses told police that the suicide bomber left a car, boarded the packed bus and blew himself up as it was leaving for Nasiriyah, 200 miles southeast of Baghdad, police Lt. Ali Mitaab said.
Fire swept through the bus, trapping passengers who had been headed to the southern city for the weekend, which starts here on Thursday evening. Charred corpses were left in the seats, their faces starring out through the shattered windows. Police climbed over the top of the vehicle inspecting what remained of luggage.
"As the bus was going outside the station, a man carrying a bag tried to got into the bus, but the conductor was suspicious about him," police Lt. Wisam Hakim said. "He tried to stop him but the man insisted. He sat in the middle of the bus and then the explosion took place."
The attack occurred at the major bus station for vehicles headed to the mostly Shiite areas of the south.
Last August the station was the scene of a horrific triple car bombing that killed at least 43 people and wounded 89.
Meanwhile, British Foreign Secretary Jack Straw on Thursday appealed again for communication from a previously unknown group holding four peace activists.
"If the kidnappers want to get in touch with us, we want to hear what they have to say," Straw said in a brief statement outside the prime minister's office. "We have people in Iraq itself and in the region, and they are ready to hear from the kidnappers."
Norman Kember, 74, of London, Tom Fox, 54, of Clear Brook, Va., and Canadians James Loney, 41, and Harmeet Singh Sooden, 32, were taken hostage in Baghdad two weeks ago. The four members of the Christian Peacemaker Teams were seized by the previously unknown Swords of Righteousness Brigade.
Their kidnappers on Wednesday extended a deadline until Saturday in their threat to kill the four. The captors also posted a video of two of the hostages wearing orange jumpsuits and shackled with chains.
The original deadline set by the group was Thursday. The extension was announced in a statement that accompanied Wednesday's video, according to Al-Jazeera and IntelCenter, a government contractor that does support work for the U.S. intelligence community.
They four are among seven Westerners who have been abducted in Iraq since Nov. 25. The other hostages are an American, a German and a Frenchman.
Videotape of the Christian peace activists provided by IntelCenter to AP Television News showed two men, who were blindfolded and shackled. The men were not identified, but still photos from IntelCenter showed they were Fox and Kember. The two other hostages were not shown.