It was not immediately clear who was behind the attack, which security forces are investigating, said local army spokesperson Anthony Mwalushayi, who gave a provisional report of three injured.
An employee at a local university clinic, Mbayahi Nathan, said the facility received 10 injured people after the explosion.
"They were between 10 and 21 years old," he said, adding that one patient's injuries were life-threatening.
Butembo, a trading hub of almost 1 million people, is sometimes the target of Islamic State-linked militants known as the Allied Democratic Forces (ADF).
An improvised bomb that detonated outside the national intelligence agency's Butembo office last month, wounding two agents, was suspected to be an ADF attack, according to local police.
Growing insecurity in Congo's mineral-rich east spurred violent demonstrations in July against the United Nations' peacekeeping mission in Congo, which was accused of being too passive. The protests, which were concentrated in Butembo, killed dozens of civilians, peacekeepers and Congolese police.
The U.N. mission pulled out of Butembo in August as a result.
The ADF is a Ugandan militia that has been active in east Congo since the 1990s and killed scores of civilians. It pledged alliance to the Islamic State in 2019.
(Reporting by Fiston Mahamba in Goma and Sonia Rolley in Kinshasa; Writing by Sofia Christensen; Editing by James Macharia Chege, Josie Kao and Jonathan Oatis)