The dawn explosions on Thursday ripped through a crowd of about a thousand people who had gathered to mark the first anniversary of the assassination of Sunni activist leader Azam Tariq.
Witnesses said the suspected sectarian attack, which left Multan's main Rashidabad Square littered with body parts and blood stains, triggered a stampede which also left several people dead.
The chief medical officer of the city's main hospital, Dr Imran Rafiq, said the toll had reached 40, with many of the wounded blaming the attack on Shia Muslim extremists.
"This attack is carried out by Shia," said Sunni community leader Muhammad Ludhianvi. "They are being funded and sponsored by the government of Iran to kill Sunnis in Pakistan."
Police believe at least one blast was a car bomb. "The bomb was probably planted in a car and as soon as the meeting was over it was detonated with a remote control or a timer," said district police chief Sikandar Hayat.
Pakistani Information Minister Shaikh Rashid condemned the attack. "It is an act of brutal terrorism aimed at creating instability in the country," he said.
The Azam Tariq memorial gathering in Rashidabad Square had lasted the whole night and the crowd was beginning to disperse when the dawn calm was shattered by back-to-back explosions.
Tariq, the founder of the outlawed Sunni rebel group Sipah-e-Sahaba of Pakistan, was shot dead on 6 October last year near the capital Islamabad. His death was also blamed on Shia extremists.
The attack follows the bombing of a Shia Muslim mosque in the eastern Pakistani city of Sialkot last Friday which left over 30 dead.
Police blame two radical Sunni Muslim groups - Lashkar-e-Jahngvi and Sipah-e-Sahaba Pakistan (SSP) - for the Shia mosque attack.
Extremists from Pakistan's Sunni majority and Shia minority, most of whom co-exist peacefully, have been involved in bitter tit-for-tat violence since the 1980s.
The conflict has so far cost more than 4000 lives.