Pavel Sheremet, 44, who reported for the news website Ukrainska Pravda and previously for Russian state television before moving to Ukraine, was on his way to the independent radio station Radio Vesti, where he hosted a morning show, according to Ukrainska Pravda.
Ukrainian President Petro Poroshenko called Sheremet's killing "a terrible crime" and ordered a swift investigation.
"He was a star and a luminary to us. He was a journalist who deeply understood the social and political canvas of modern times," his colleges said in a tribute on the Ukraisnka Pravda website. "He contributed an amazing spirit and essence to our office."
Security footage from the scene shows Sheremet's car being engulfed in fumes and flames, as passersby rush to the charred vehicle looking for survivors. Sheremet was the only person in the car, which belonged to his partner, Ukrainska Pravda founding editor Olena Prytula.
Poroshenko said he had asked international partners, including FBI and EU experts, for help in the investigation.
At a meeting with the President and security officials Wednesday, National Police Chief Khatia Dekanoidze said the explosive device was equivalent to 400-600 grams of TNT.
Sheremet is the highest-profile journalist killed in the country in 16 years.
A native Belarusian, Sheremet has been an outspoken critic of Belarusian, Ukrainian and Russian leaders.
His killing has raised speculations that he was targeted because of his work.
Sheremet was jailed in Belarus in 1997 for his reporting critical of President Alexander Lukashenko's government, and eventually stripped of his citizenship.
He worked for Russian state television ORT before moving to Ukraine and joining Ukrainska Pravda, whose founder, Georgy Gongadze, was abducted and killed in 2000.
In a statement, the Russian Foreign Ministry called Sheremet's killing "cynical" and "cruel," denouncing speculations that the perpetrators may have links to Russia.
"We are shocked by the cynical murder of Russian citizen Pavel Sheremet in central Kiev," said the statement. "He was a known and respected journalist in Russia and a top professional."
"As it often happens in today's Ukraine, some Russophobic people immediately found a 'Russian trace' in this cruel murder," the statement reads. "We expect an unbiased and meticulous investigation of these crimes and punishment for all their culprits."
Shermet was a recipient of the Committee to Protect Journalists' International Press Freedom Award in 1998 and the Organization for Security and Co-operation in Europe's Prize for Journalism and Democracy in 2001.
"We honored Pavel Sheremet in 1998 with an International Press Freedom Award in recognition of his courage, his integrity, and his commitment to the highest ideals of journalism," CPJ Executive Director Joel Simon said in a statement Wednesday.
"He upheld those standards through his years even as he mentored and inspired a generation of journalists in Ukraine. His killers cannot be allowed to get away with this terrible crime."