A bomb ripped through the stands on Saturday just as Bollywood star Shahrukh Khan ended a concert that went ahead despite complaints by Buddhist monks unhappy that the show coincided with the anniversary of the death last year of a popular monk.
"Two people were dead when they were brought in," a doctor at the Colombo national hospital said.
"There are another 15 injured admitted. They all have shrapnel injuries caused by a hand grenade or a hand bomb."
India star Khan and his troupe were unharmed, police said.
The monks called off plans to protest during the three-hour concert, but their followers clashed with police who fired teargas, water cannon and rubber bullets to disperse mobs near the concert venue.
Police also arrested more than a dozen men who attacked cars and concert-goers.
The monks cancelled their plans to protest after receiving a written apology from Khan over the bad timing of what was billed as Sri Lanka's biggest musical event of the year.
Khan began his concert by observing a minute's silence in memory of monk Gangodawila Soma who died a year ago.
The concert went ahead under tight security, with fans searched at four points before being allowed into the venue which had earlier been inspected by police and sniffer dogs.