Authorities said the 43-year-old man who died was a Turkish citizen with links to drug rings and other organised crime.
Murder investigators blocked off a section of Bismarckstrasse, a major thoroughfare lined with shops and restaurants, after the VW Passat estate exploded at about 8am.
The incident took place in the residential Charlottenburg district not far from the Deutsche Oper, one of the city's three opera houses.
Shocked onlookers watched as the vehicle suddenly exploded while moving, travelling another 100 metres before colliding with a parked car.
Photos of the scene show the vehicle surrounded by debris in the middle of the street with its doors open and windows blown out, with no damage visible to surrounding buildings or parked cars.
Investigators believe the blast was caused by an explosive device and initially urged people to stay off balconies in buildings along the street.
Around noon, police gave residents the all-clear after explosives experts inspected the wreckage.
"There's no indication of a terrorist background," said Martin Steltner, a spokesman for Berlin prosecutors.
"(The) explosion occurred inside or on the vehicle," said Carsten Mueller, deputy chief spokesman for Berlin police.