A Christian leader said the attack, the first on a Christian church, marked the "saddest day'' in the history of the religion in the impoverished mountain nation.
The church - Kathmandu's only Roman Catholic place of worship - was jammed with 500 people when the device went off at the start of morning Mass, creating panic as people rushed for the exits, police said.
A pamphlet of an obscure Hindu extremist group called the National Defence Army was found at the blast site in Lalitpur, a district adjoining Kathmandu, police said.
But police said it was too soon to assign blame for the attack on the Church of Assumption which came hours before lawmakers were due to vote in a new premier after weeks of political instability in the world's newest republic.
"A 15-year old student, Celestina Joseph, and 30-year-old Pabitra Paitri died in the bomb blast.
Five of the injured are in serious condition,'' police officer Ram Brish Chaudhary said.
It was the first attack on a Christian church in the Hindu-dominated Nepal.
The bombing came as lawmakers were due to choose a new premier, three weeks after Maoist prime minister Prachanda quit, plunging the nation into a crisis triggered by a stand-off between his ex-rebels and the army.