The bus was on its way to Latur from Udgir and had halted at the village bus stop around 7.30 pm when the blast happened.
Four passengers are reported in critical state and others were admitted with severe burn injuries.
According to eyewitnesses, blood and pieces of human flesh were splattered all over the blast site.
The local police cordoned off the area and the Superintendent of Police (Latur) barred all civilian movement in the area.
The bomb squad, as well as the dog squad, had been called in and were screening the blast site at the time of going to press.
The impact of the blast was such that the front three windows on the right side of the bus were ripped off from the vehicle. The front windscreen was completely shattered.
The driver of the bus, as well as the conductor , have been taken in for questioning. According to passengers, three people had got off at Yerol before the bus halted at Nalegaon. A total of 30 passengers were on board the bus when the mishap occurred.