The matatu was ferrying an unknown number of passengers to Mandera Town when it ran over an IED.
Police said at least eight other passengers were seriously injured in the incident
Police suspect the IED was set up by al-Shabaab militants operating in the area after crossing the porous Kenya-Somalia border.
North Eastern new regional commander George Seda said no arrest has been made after the incident but teams were on the ground to pursue those behind the bombing.
The terror attack comes four days after a terror warning was issued by various western governments including France, the USA and Netherlands.