Additional Inspector General Ashraf Noor was leaving his home for work when the bomber rammed into his vehicle, city police chief Tahir Khan said.
The vehicle was engulfed in flame, killing Noor on the spot while six other policemen sustained injuries, a police official said.
The vehicle caught fire after the blast and a thick cloud of smoke could be seen billowing from the area, police said.
The suicide bomber, on a motorbike, targeted the police convoy.
Around 15-20 kilograms of explosives were used in the Peshawar suicide blast, Bomb Disposal Unit squad officials said after inspecting the site.
There were conflicting claims regarding the number of dead and injured in the blast, Dawn reported.
Khyber Pakhtunkhwa police chief Salahuddin Mehsud told AFP that three policemen were among the five injured, and were being treated at hospital.
No group has claimed responsibility for the attack.
He lauded the sacrifices of police personnel in the fight against terrorism, saying such dastardly acts of the militants cannot deter Pakistan's law-enforcement agencies and the nation in taking the fight against terrorism. Our resolve to eradicate the menace of terrorism can not be shaken, Abbasi said.
Local police confirmed that a blast which killed two police personnel, including a high-ranked officer, in Pakistan's northwestern provincial capital of Peshawar on Friday was a suicide attack.