A female suicide bomber killed 35 Shi'ite pilgrims as they made their way to a religious ceremony just after midday on Friday. Another 68 were wounded.
The pilgirms, mostly women and children, were travelling on foot to the holy city of Karbala, 110km south of Baghdad.
A bomb near the same shrine 11 months ago killed 43.
It was the deadliest attack in Iraq since 4 January when a male suicide bomber killed 35 people near a Shi'ite shrine in Baghdad.
Five million pilgrims are in Karbala for Arbaeen, a ceremony to mark 40 days after the Ashura; the anniversary of the killing of Imam Hussein by Sunni caliph Yazid's armies in AD 680.
On Wednesday, 16 people were killed by bombs near a bus station in Baghdad.