The blast occurred shortly before noontime as the vehicle, owned by Weena Transit, was returning to the city's bus depot from Davao. At least 7 people were injured in the explosion, police said.
Other reports said more than a dozen people, mostly sidewalk vendors, were hurt in the blast.
A military report said the bomb was probably made from ammonium nitrate, a banned chemical fertilizer commonly used by insurgents to make homemade explosives. Several buses were also damaged from the explosion.
It was not immediately known how many passengers were in the bus when the explosion occurred. But military and police investigators said they found traces of the chemical explosive at the rear of the bus, where the bomb was believed planted.
Southern Command spokesman Major Gamal Hayudini said authorities were investigating the blast. "There is an investigation going on and we still don't know who were behind the latest explosion," he told the Zamboanga Journal.
No group claimed responsibility for the attack, although authorities previously linked the New People's Army (NPA) in extortion activities on bus operators in the province.
Authorities were also investigating whether the Abu Sayyaf group tied to the al-Qaeda terror network was connected to the attack.
The Abu Sayyaf was implicated by authorities in previous bombings of three passenger buses during last year's Valentine Day celebration in the southern port cities of General Santos and Davao, and Makati, the country's financial district.
At least 7 people were killed and dozens injured in the three attacks owned up by a senior Abu Sayyaf leader, Abu Solaiman.
The group was also implicated in the December 2004 bombing of General Santos, where more than a dozen people were killed, and similar attacks in Zamboanga City and Cotabato provinces.