A further 15 people were injured, nine of them German.
Turkish President Tayyip Edrogan said a Syrian suicide bomber was responsible for the attack in the Sultanahmet district.
“I condemn the terror incident in Istanbul assessed to be an attack by a suicide bomber with Syrian origin,” he said. “Unfortunately we have 10 dead, including foreigners and Turkish nationals… there are also 15 wounded.”
Prime Minister Ahmet Davutoglu said the bomber was a foreign member of Islamic State. He said most of the wounded were German and he had spoken to Chancellor Angela Merkel to express his condolences.
The bomb attack occurred in Istanbul’s main sightseeing area that includes the Topkapi Palace and Blue Mosque.
Police sealed the area, barring people from approaching in case there was another explosion. “We’re taking precautions against a second explosion,” a police officer said as he ushered people out of the area.
Kurdish, leftist and Islamist militants have all carried out bombing attacks in Turkey in the past.
Turkey has also become a target for Islamic State, with two bombings in 2015 blamed on the Sunni Muslim extremist group in the town of Suruc, near the Syrian border, and the capital Ankara, the latter killing more than 100 people.
Two senior security officials told Reuters shortly after the bombing that there was a strong probability IS militants were behind the attack.