The blast occurred in Adezai area of Peshawar city, the capital of Khyber Pakhtunkhwa province bordering Afghanistan, Geo News reported.
About 150 people were attending the funeral of the wife of a pro-government tribal leader when the explosion took place in Adezai area, around 20 km southeast of Peshawar, DPA said.
Adezai is a village where a militia group called Aman Lashkar is supporting the government in the fight against the Taliban, the report said.
'It was a suicide attack,' said Siraj Ahmad, a senior government official in Peshawar. 'Thirty-four people are dead and 42 injured.'
A witness told Geo television that the lone suicide bomber was about 35 to 40 years of age and he shouted 'God is great' before detonating the explosives.
Another witness said the blast threw him to the ground. 'When I got up I saw there were bodies lying everywhere.'
The suicide attack came a day after a car bomb near the office of the military's Inter-Services Intelligence agency killed 26 people and injured 131 in Faisalabad, a key industrial city in Punjab province.
The Taliban took responsibility for the Tuesday's bombing.
Nasim Sadiq, the top government official in Faisalabad, said Wednesday that around 200 kg of explosives were detonated by remote control.
'They had parked the vehicle near the compressor of a CNG (compressed natural gas) station and wanted to blow up the compressor,' Sadiq was quoted as saying.