But in March militants laid siege to a police compound in the city, killing eight people, and weeks earlier the Sri Lanka cricket team was attacked there.
The BBC's Shoaib Hasan, in Pakistan, says Lahore is facing a sustained campaign of violence unlike any it has seen before.
He says security officials believe the city is under attack because it is seen as a stable home for Pakistan's Punjab-dominated army.
The army is claiming sweeping victories against Taliban insurgents in the Swat valley, near the Afghan border - saying more than 1,000 militants have been killed in the past month.
Militants had threatened revenge attacks in Pakistan's cities after the military stepped up its operations in the Swat valley.
After the latest attack, television footage showed rescue workers sifting through the debris, pulling half-conscious police officers from the rubble.
Bulldozers and other heavy lifting equipment have been brought in as many people are feared trapped under the debris.
Officials told reporters a car pulled up near the police headquarters and a group of gunmen got out and opened fire.
When police returned fire, the gunmen's car exploded.
BBC News website readers in the city described hearing a huge explosion.
Zubair Bukhari, who was in his office about 500m away from the blast, said it rocked the entire building.
"Glass windows shattered to pieces and the ceiling came down on the floor," he said.
Another reader, Matthias Gattermeier, said: "I ran out of the building and saw a surreal huge ring of white smoke rise into air."
Politicians from around the world have condemned the attack and offered condolences to Pakistan.
US ambassador Anne Patterson said the attacks "show the lengths extremist elements are willing to go to as they attempt to force their agenda on to a people who only wish to go about their daily lives in peace".
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