Aftab Khan Sherpao was not wounded in the blast, which was reported to have gone off at a mosque in the ex-minister's compound, some 40 km (25 miles) northeast of Peshawar.
Around 1,000 people had been offering prayers for the Muslim festival of Eid al-Adha when the suicide bomber detonated the explosive device.
The bomb is believed to have contained around 8 kilograms (17 lbs) of explosives and to have been filled with nails and ball bearings. Sherpao's son is reported to have been wounded in the blast, although the extent of his injuries was not immediately clear.
There was speculation that the attack may have come as revenge for a military assault on radical students and clergy holed up inside the Red Mosque in Islamabad, in July, 2007 when Sherpao was still in office.
A spate of suicide attacks have torn across Pakistan since the Red Mosque assault, in which more than 100 Islamic clerics and students were killed.
Hamid Nawaz, the acting Pakistani interior minister, told the press that the attack had targeted Sherpao in retaliation for his attempts to fight against "criminal groups" during his time in office.
The army said the blast could have been linked to a recent operation against militants in the Swat valley, in which around 300 gunmen were killed.
Sherpao was slightly wounded in an attempt on his life on April 28 at a rally for his political party in Charsadda. Twenty-eight people were killed in the attack.
The violence came as Pakistan geared up for next month's general election. Ironically, President Pervez Musharraf had lifted the state of emergency on Saturday, claiming that the threat from Islamic militants had been partly dealt with and contained.
Sherpao is set to run as a candidate for parliament in the election on January 8.
