The attack occurred in Nairobi’s Eastleigh neighbourhood, home to a sizeable Somali community.
Similar attacks were carried out in the area last year and blamed on Somalia’s al Shabaab Islamist group who claimed to be behind the Nairobi mall siege that killed 67 people.
Local police told Reuters at least four people were killed in the attack, which involved the use of a grenade according to local police.
The Kenyan Red Cross reported on Twitter that 15 people were injured in the blast and three later died from their injuries.
It is not known what motivated the attack and no groups have yet claimed responsibility which comes just a day after a grenade attack on a market in Wajir, northeast Kenya, where one person was killed.
Earlier in the week, attackers threw a grenade at British tourists in the Kenyan port city of Mombasa, but it failed to explode.
The tourists were travelling from the popular Indian Ocean resort of Diani on the way to a wildlife safari at the Masai Mara national park.
Kenya has seen a wave of grenade attacks since it invaded southern Somalia in October 2011 to try to oust al Qaeda-linked al Shabaab insurgents.
When will security be taken serious?
Its Parker baby