The bomb ripped through the Church of the Assumption (Catholic) in the town of Lalitpur, south of Kathmandu, the capital, on Saturday.
The wounded people have been rushed to a local hospital and police are investigating. A witness who was attending the church service said a bag was left lying on the floor and someone moved the bag to make some space and it just exploded with a loud noise.
A Hindu extremist group, the National Defence Army, left a note found at the scene.
The National Defence Army, which says it is fighting to restore the nation's Hindu monarchy abolished in 2008, has previously claimed responsibility for the killing of a missionary in eastern Nepal last July.
About 500 people were attending a service at the time of the blast. A 15-year old student, Celestina Joseph, and 30-year-old Pabitra Paitri died in the bomb blast. Five of the injured are in serious condition.
