The bomb went off at a karaoke cafe around 15:00 GMT in South Sulawesi province's Palopo region.
Asked whether a bomb had exploded, a police official in Palopo told Reuters by phone: "Yes, that's true," adding that it happened at a cafe on the road to Makassar, the capital of South Sulawesi, which lies 1400 km east of Jakarta.
Asked whether police had any theories on who was behind the Sulawesi blast or details on the bomb, Nursi said: "The forensics team from Makassar is still on the scene. So far there is no lead."
Another police official, Muhammad Nursi, told Reuters that in addition to the four killed, three people were wounded in the explosion.
A nurse at a Palopo hospital said the three had been brought there and then released after treatment for minor injuries. She said the victims were local.
The last time an explosion rocked Indonesia was on 5 January in the city of Medan, in the northern Sumatra province. There were no reports of casualties.
New Year's eve bomb
On New Year's eve, nine people were killed and 32 injured when a bomb exploded during a concert in Indonesia's strife-torn Aceh province.
The powerful bomb tore through the stage where the concert was being held at Peureulak, military spokesman Lieutenant Colonel Ahmad Yani Basuki said.
Two children, aged one and seven, were among the dead. Basuki said most of the dead victims were teenagers and blamed the attack on rebels of the Free Aceh Movement (GAM).
GAM, however, denied responsibility.
The military is mounting an all-out offensive to crush separatists in Aceh, where GAM has been fighting for independence since 1976. Most victims of the separatist war, which has claimed an estimated 12,000 lives since 1976, have been civilians.