The incident occurred on Tuesday in Diankabou, a small town about 150 kilometers (90 miles) east of the city of Mopti, they said.
A local official told AFP it was caused by "an explosive device which was planted on the body of a man who had been shot dead."
A security source confirmed the information, saying: "The body exploded, killing 17 people."
Among the victims were the parents of the man whose body had been booby-trapped, he said, Presstv reported.
The man had gone to find food for his cattle and had never returned. His parents then found the corpse.
"They rather unwisely approached the body which exploded, killing 17 people. The gunmen who killed him had planted explosives on his body and around it," the source said.
"This is a method that [extremists] use to cause maximum deaths," another security source said.
The attack was the first incident of its kind in Mali. On February 14, extremists in neighboring Burkina Faso used an identical method, rigging a corpse dressed in military fatigues with explosives. The blast killed two police officers and an army doctor.
Mali has been struggling to return to stability after Al-Qaeda-linked extremists took control of the north in early 2012, prompting a military intervention by France.
Although they were routed in the French operation in 2013, large stretches of the landlocked African state remain out of government control.
Most of the violence is centered in Mali's central and southern regions but it has also spread across its borders, affecting neighboring Burkina Faso and Niger.
The country has also been blighted by inter-communal violence between farmers and herders which last year killed more than 500 civilians, UN figures show.