The casualties included women, children, elderly people, doctors and nurses.
The Afghan health ministry said the attack was unpredecented and inhumane.
Officials blamed the Taliban, but a Taliban spokesman said the movement did not target civilians and the blast was caused by "someone with an agenda".
Provincial official Din Mohammad Darwaish said the death toll could well increase as there were people buried under rubble.
Soldiers have been dispatched to the scene to try to pull out those that are trapped.
'Disgust and hatred'
A large number of people had been gathering at the clinic, in Azra district, for weekly treatment, many of them women, children and elderly people, Mr Darwaish said.
"The target of the blast is not clear but what is obvious is that a hospital was attacked and civilians were killed," he said.
A statement by the public health ministry, quoted by AFP news agency, expressed "disgust and hatred" towards the perpetrators of the attack.
"This inhumane act is unprecedented in the history of the conflict in our country and targeted a place where wounds are healed and patients receive treatment," it said.
The BBC's Bilal Sarwary in Kabul says there has never been an attack on a hospital in Afghanistan on this scale, although last month a suicide bomber attacked the main military hospital in Kabul, killing six people.
There is almost no central government control over Azra, which is close to the Pakistan border, and insurgents and smugglers are well-established there, our correspondent adds.
The attack comes a day after 10 people were killed and 24 injured in a blast in the northern Kunduz province.
On Wednesday US President Barack Obama announced a partial troop pullout from Afghanistan.
He said 33,000 troops would leave this year, with the remaining 68,000 departing by 2013.
But there are concerns among the top US military that the withdrawal will be more risky than they have advised.
American Family: A Televised Life (Visible Evidence)
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