Eyewitnesses said on Monday that the explosion at 1330 GMT, originated from a car driving through Batumerah, a predominately Islamic area of the city.
Batumerah has been the scene of sporadic violence between Muslim and Christian communities.
All three victims are believed to be Muslims and were taken for treatment at the nearby Al-Fatah and Al-Mukadeh Muslim hospitals.
One local journalist, quoting police sources, said as many as 11 people may have been wounded in the explosion, with three seriously hurt.
The vehicle believed to have been involved in the blast is being examined by members of paramilitary police deployed to the area.
Ambon and some other parts of the Malukus were ravaged by three years of Muslim-Christian clashes that killed more than 5000 people before a February 2002 peace pact took effect.
But sporadic violence has continued and tension between the two communities remains high in Ambon and several of its surrounding small islands.
Police last month sent a team of elite snipers to reinforce Ambon, anticipating unrest ahead of a regional separatist group's "independence day" next month.
Outlawed supporters of the self-declared Republic of South Maluku are expected to attend a flag-raising ceremony to mark the day on 25 April.
In April last year, a banned parade by Christian-affiliated separatists sparked violence in which at least 38 people were killed after a week of bloody communal unrest.