The blast occurred at 8 p.m. at a market filled with shoppers stocking up on fruits and vegetables for dinner, turning the area into a horrific scene of blood, bodies and mayhem.
No one claimed responsibility, but officials suspected the militant Islamic group Boko Haram, which has unleashed years of violence in the region. A police spokesman, Othman Abubakar, said officials were investigating.
Nigeria has increased its fight against Boko Haram as part of a pledge from the new president, Muhammadu Buhari, to finish it off by the end of the year.
Earlier on Tuesday, Mr. Buhari ordered the arrest of the former president’s national security adviser, Sambo Dasuki, accusing him of stealing more than $2 billion that Mr. Buhari said should have gone to pay for weapons to fight Boko Haram.
Mr. Dasuki, whom Mr. Buhari quickly fired along with other top military officials upon taking office, pleaded not guilty last month to other money laundering charges and released a statement saying he was surprised by the recent action.
Nigeria has been working with neighboring countries to root out Boko Haram and is receiving guidance from American and French military officials.
Many of the region’s top officials, as well as international experts, say Boko Haram has lost its footing recently and is no longer capable of overtaking entire villages or of kidnapping large groups of people. Instead, official said, the group is left to stage small-scale attacks on markets and other public places.
On Tuesday, the havoc that such attacks can wreak was obvious in Yola. Family members and others gathered, some crying, as they awaited information about missing relatives and friends.
A girl named Aisha Aliyu said that her two young cousins had narrowly escaped the blast but that a friend and the woman’s four children, who had been hawking goods, had died. “It is really tragic for us,” she said.
Late Tuesday, Mr. Buhari extended condolences to those affected by the “callous attacks,” saying on his office’s Twitter account: “The enemies of humanity will never win. Hand in hand, we will rid our land of terrorism.”