The incident at the Shama cinema, known for showing pornographic films in one of its auditoriums, came 11 days after a similar attack in another movie theatre in the same city.
"Initially we can say two blasts inside one of the halls of Shama cinema were caused by hand grenades," senior police official Najib-ur-Rehman told AFP.
"Ten people were killed and 16 others were wounded in the attack."
An official at Peshawar's Lady Reading Hospital, Syed Jameel Shah, confirmed the death toll.
Peshawar, the capital of restive Khyber Pakhtunkhwa province and close to the Taliban-infested tribal areas, has been on the front line of Pakistan's homegrown Islamist insurgency which has claimed thousands of lives.
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