Officials say the four blasts occurred within minutes of each other - all in areas crowded with people enjoying the Diwali weekend, the annual Hindu festival of lights.
The first explosion rocked Paharganj, an area popular with Western backpackers near Delhi's main train station. Two more blasts took place in crowded markets and the fourth, on a bus.
Broken glass and burned bodies lay in the streets as rescuers tried to help the injured why contending contended with fires that broke out in the market areas as a result of the bombs.
Local media report that Indian Prime Minister Manmohan Singh has cut short a trip to the eastern city of Calcutta to return to the capital. Both he and the head of his ruling Congress Party, Sonia Gandhi have condemned the attack as an act of terrorism.
"Terrorism is something that is a menace that we all have to face and fight together," said Sonia Gandhi. "This is not only a phenomenon which is here in our country. As you all know, it is something which is - the world has to face. So I feel it's important altogether, all of us together, to fight it."
Security forces are on alert in Bombay and other cities and have ordered the closure of all markets in the capital.
Officials have not yet said who they believe is responsible for the attacks.
The government in New Delhi faces threats from dozens of militant groups across the country. Suspicion for Saturday's attack is likely to fall on some of the larger Kashmiri militant organizations, which have carried out attacks on the capital in the past.
Kashmir is divided by India and Pakistan. Both countries claim the region in its entirety, but they are observing a ceasefire as they engage in an on-going peace process.
For the past 15 years however, Islamic insurgents have waged a violent struggle against Indian forces in the two-thirds of Kashmir under Indian administration.
India insists the ultimate resolution of the Kashmir conflict depends on Pakistan giving up its support for militant organizations, which it says use Pakistan as a base to carry out attacks in India. Pakistan denies providing the militants any support.
In 2001, gunmen attacked the Indian parliament, killing 12 - an attack New Delhi blamed on militants backed by Pakistan. The incident brought India and Pakistan - which are nuclear rivals - to the brink of war.
The latest attack come as senior Indian and Pakistani officials met in Islamabad to discuss whether to open points along their contested border in Kashmir to improve the flow of humanitarian assistance following the devastating earthquake earlier this month.
The shared tragedy of the earthquake - which claimed more than 50,000 lives - has raised hopes it would help the two long-standing rivals overcome past differences.
Pakistan has condemned Saturday's attack in New Delhi.