Locals heard a loud explosion which broke windows, shattered glass and sparked a fire at a shopping area in the centre of the city, one of Turkey's most popular tourist destinations.
"I saw two wounded tourists and a burned body of a dead man who was a pastry vendor," said journalist Riza Ozel on holiday.
Officials at three hospitals contacted by Reuters said they had received 38 wounded people.
The Antalya blast came as Turkish police arrested a man they said was plotting a further bomb attack in the city of Izmir.
The Turkish state news agency said the man was from the Kurdistan Workers Party (PKK) separatist group.
It said other people were also detained for helping the suspect and that plastic explosives were seized in the operation.
It also came less than 24 hours after three separate bombs in the coastal tourist resort of Marmaris injured 21 people within 15 minutes. Another device in Istanbul wounded six people.
The BBC reported that a Kurdish militant group with links to the banned PKK claimed responsibility for the Marmaris and Istanbul blasts.
"We had warned before, Turkey is not a safe country. Tourists should not come to Turkey," the Kurdistan Freedom Falcons (Tak) said on its website.
Television images from Antalya showed shattered shop windows with goods scattered, bicycles torn apart on the street, gathered crowds and a man carrying an injured woman.
Two people were killed in the attack, with local police saying up to 50 may have been hurt. Shortly afterwards private broadcaster NTV reported a third person had died at hospital from injuries.
The identities of the injured were not immediately known. There were no immediate claims of responsibility but authorities are reportedly looking for two suspects.
A nearby street had been shut off to traffic because a suspicious bag was found. A bomb squad was on its way to the scene.
Marmaris bombs
In Marmaris, 10 Britons and six Turks were wounded when a bomb placed under a seat in a minibus exploded on a street crowded with bars and restaurants around midnight.
"Who did this? What do they want from these people?" Suzanne Bedford, whose two grandchildren were being treated at the Ahu Hetman hospital in Marmaris, asked an official.
Local authorities pledged to find the culprits, suspected of belonging to the banned PKK group.
The PKK has waged a more than 20-year campaign to carve a homeland in the mainly Kurdish south-east.
Antalya and Marmaris are resorts popular with European and Russian tourists as well as Turks. Millions of foreigners flock to its coastline each summer.
Locals are concerned the tourist industry, a powerful motor of the Turkish economy, would be further dented by the attacks, the latest in a string of bombings over the past year.