The far-west Xinjiang region, home to the mainly Muslim Uighur minority, has seen periodic violence.
Beijing says it faces an increase in terrorism from a violent separatist movement there, driven by religious extremism and foreign groups.
"Notorious terrorist group the Eastern Turkistan Islamic Movement (ETIM) was behind the fatal attack," the official news agency Xinhua reported, citing police.
China's top security official previously described ETIM as "behind-the-scenes supporters" of a deadly October attack on tourists in Beijing's Tiananmen Square.
Critics claim the threat posed by such groups is exaggerated to justify hard-line measures, and instead point to cultural and religious repression and resentment that economic development has mostly benefited an influx of ethnic Han.
On April 30, the final day of a visit by President Xi Jinping to the region, assailants armed with knives and explosives carried out an attack at a railway station in Xinjiang's capital Urumqi, killing one person and wounding 79.
The main plotter had formulated plans from abroad, then eight days before the incident ordered 10 people to make an explosive and choose a target, Xinhua said in a later report.
The two people who carried out the bombing died and the remaining eight have been arrested, it said.
Chinese police were working with Interpol to detain the plotter, who Xinhua said had "promoted extremist religious ideology and undertook illegal religious activities" for the past decade. He linked up with ETIM in 2012 and fled overseas last year because he was wanted by police.
A group named the Turkestan Islamic Party (TIP) released a video online showing the construction of a briefcase bomb allegedly used in the attack, the US-based SITE Intelligence Group, which monitors extremist organisations, said last Tuesday.
But in response to that, several analysts said they doubted whether the TIP had the ability to launch such attacks, suggesting that it could be looking to raise its profile.
Little is known about ETIM and TIP, and experts are divided over whether the two groups are part of the same organisation.
In recent months violence attributed to people from Xinjiang has spread beyond that region.
In March attackers went on a stabbing spree at a railway station in the southwestern city of Kunming, leaving 29 people dead and 143 injured in an incident dubbed "China's 9/11" by state media.
And in 2009 ethnic riots erupted in Urumqi between Uighurs and the country's majority Han Chinese, leaving 200 people dead and prompting a security crackdown.