The homemade device exploded as visitors were eating dinner at about 10.30pm (1730 GMT) in the remote town of Fatahpur, 300km from Quetta, the capital of the Baluchistan province.
"I can confirm that 35 bodies have been counted," local district administrator Mahmud Mari said.
Many more were injured but it is unclear how many, because most of them were taken to hospitals in nearby areas as the town has only basic medical facilities.
"I saw 25 bodies myself. People were crying and there were pools of blood," Muhammad Amin Umrani, the mayor of neighbouring Nasirabad, said.
Between 10,000 and 20,000 people had gathered for an annual event at the shrine of Cheesal Shah, and many were having their evening meals when the bomb went off, said Said Kami Shah, the brother of the shrine's custodian.
Sufism is a mystical branch of Islam. Devotees from Islam's Sunni and Shia sects were at the site, as well as a number of Hindus, Shah added.
A second, unexploded homemade bomb was found near the shrine shortly after the first device detonated, Umrani said. It was removed safely.
There is no indication if the bombs are linked to longstanding sectarian tensions in Pakistan, or to an escalating tribal rebellion that has hit Baluchistan in the past year.
"I saw 25 bodies myself. People were crying and there were pools of blood"
Muhammad Amin Umrani,
Mayor of Nasirabad
No one has yet claimed responsibility.
Religious violence in Pakistan has claimed about 4000 lives in the past decade, although most of the 80% Sunnis and 17% Shias making up the Islamic republic's 150 million population coexist peacefully.
One of the bloodiest incidents was an attack on a parade in Quetta marking the holiest day in the Shia calendar in March 2004 that left 48 people dead.
However, tensions are also high in southwestern Pakistan following fierce gunbattles between tribesmen and soldiers on Thursday that left at least 30 dead and 70 injured.
Hundreds of terrified people fled their homes in Dera Bugti, 245km southeast of Quetta, after a clan chieftain warned them their safety could be at risk.
Pakistan's military blamed the violence on the tribesmen, saying they ambushed a convoy of paramilitary soldiers and attacked a nearby base. There has been no independent confirmation of the sequence of events.
Many were injured in clashes near
Quetta on Thursday
The tribesmen want more royalties and jobs from the province's natural resources and in January attacked Pakistan's largest gasfield in what they said was revenge for the rape of a female doctor there.
One person died and nine were wounded by two bombs that exploded on separate trains going to and from Quetta on Friday evening.