"Four people are dead, and there are 35 injured," Red Cross communications director Ayad al-Monzer said.
The official National News Agency said the attack appeared to be a suicide bombing.
"Body parts apparently belonging to a suicide bomber were at the scene," it said.
The attack took place on a busy commercial street in the Haret Hreik neighbourhood in southern Beirut.
"The explosion took place on Al-Arid street in Haret Hreik," Hezbollah's Al-Manar news station reported.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
The street was targeted by a suicide car bombing in early January.
An AFP photographer at the scene saw troops and Hezbollah security men deployed as firemen worked to put out the flames and health workers transported the injured to nearby hospitals.
The blast is the sixth in a string targeting areas considered strongholds of Hezbollah since the group announced it was sending fighters to support President Bashar al-Assad's troops in neighbouring Syria.
And it is the third to hit the group's strongholds in a month.
Less than a week ago, a car bomb exploded in Hermel, a town in the eastern Bekaa valley, killing three people.
And on January 2, a suicide car bombing hit the street targeted on Tuesday, Al-Arid in southern Beirut, killing five people.
The Hermel attack was claimed by Al-Nusra Front in Lebanon -- an apparent franchise of the jihadist group fighting in Syria.
The earlier attack against the southern suburbs was claimed by the Islamic State of Iraq and the Levant (ISIL).
Al-Nusra Front is Al-Qaeda's official arm in Syria, and ISIL has its roots in Al-Qaeda in Iraq.
Lebanon has suffered a spike in violence since the war in Syria broke out, with the frequency of attacks rising in recent weeks.
Local television channels broadcast footage of scores of firemen working to put out a blaze, as scores of people gathered at the scene of the blast.
