The bombs sited about 3km apart detonated as crowds of pilgrims passed by.
Security officials said they suspected Sunni insurgents were behind the attacks, although no group has claimed responsibility.
While violence has dropped dramatically in the past years in Iraq, suspected Sunni insurgents regularly target Shia religious ceremonies and holy places in an attempt to re-ignite sectarian tensions that brought Iraq to the brink of civil war in 2005 and 2007.
Hundreds of thousands of Shia pilgrims are expected to descend on Karbala and the nearby holy city of Najaf for commemoration ceremonies on Wednesday marking al-Mahdi's birth.
Devotees believe the Hidden Imam will return someday to usher in peace and harmony in the world.