Police and rescue workers said the blast near a bank and hospital in the Jaitaui residential quarter on the southern slope of al-Ashrafiah hill came just before midnight (2100 GMT) on Friday.
The man killed was a Lebanese citizen of Armenian origin, and
one of the wounded was in serious condition, said police.
The explosion, heard several kilometres away, caused numerous fires in nearby buildings and cars, which were visible from vantage points in the city.
Security services said at least 15kg (30 pounds) of explosives were used, either packed inside or underneath a car.
"What we lived this night was like hell," Eva Nashleklian told Reuters news-agency as she wiped blood off her arm.
The facade of a four-storey apartment building was completely destroyed, balconies collapsed, and cars parked nearby were burned out.
The explosion blew out all the windows in buildings in the neighbourhood and caused numerous fires, which were visible from vantage points in the city.
A series of explosions have targeted Christian-dominated areas in Beirut since the February killing of former Prime Minister Rafiq al-Hariri and 20 others in a huge car bomb.
An anti-Syrian legislator accused the remains of Syria's security apparatus of being behind Friday's blast. "This is a criminal act that comes as part of a series of other criminal acts that Lebanon witnessed," Atif Majdalani said. "The remains of the Syrian and Lebanese security regime are still present and they are behind this act."
Another anti-Syrian legislator Michael Pharaun said "it is for sure a message against stability in Lebanon". He added that it comes before a planned conference on Lebanon in New York on Monday.