An official said the inner reactor container remains intact after the explosion. There was little possibility that radiation has leaked, he said.
Japanese news agency NHK reported that it likely occurred when a combination of hydrogen and oxygen was ignited.
Tokyo Electric Power Co. said three people were injured and seven were missing after the explosion.
The reactor had been under emergency watch for a possible explosion as pressure built up there following a hydrogen blast Saturday in the facility's Unit 1.
Japan's nuclear crisis intensified as authorities raced to fight the threat of multiple nuclear reactor meltdowns at the Dai-ichi nuclear power complex.
More than 180,000 people were forced out of their homes along the northeastern coast where fears spread over possible radioactive contamination. However, officials said the radioactivity released into the environment so far was so small it didn't pose any health threats.
Two separate explosions damaged the cooling systems in two reactors. Officials said a partial meltdown is likely with one of the reactors and authorities used sea water to help stabilize the other.
Energy experts are working around the clock to prevent the disaster from growing worse.
Chief Cabinet Secretary Yukio Edano said Sunday that a hydrogen explosion could occur at Unit 3 of the Fukushima Dai-ichi nuclear complex, the latest reactor to face a possible meltdown.
"At the risk of raising further public concern, we cannot rule out the possibility of an explosion," Edano said. "If there is an explosion, however, there would be no significant impact on human health."
Edano said none of the Fukushima Dai-ichi reactors was near the point of complete meltdown, and he was confident of escaping the worst scenarios.
A complete meltdown - the collapse of a power plant's ability to keep temperatures under control - could release uranium and dangerous contaminants into the environment and pose major, widespread health risks.
According to a spokesman from Japan's nuclear agency, up to 160 people, including 60 elderly patients and medical staff who had been waiting for evacuation in the nearby town of Futabe, and 100 others evacuating by bus, might have been exposed to radiation.
The severity of their exposure, or if it had reached dangerous levels, was not clear. They were being taken to hospitals.
Edano said operators were trying to cool and decrease the pressure in the Unit 3 reactor, just as they had the day before at Unit 1.
"We're taking measures on Unit 3 based on a similar possibility" of a partial meltdown, Edano said.
Unit 3 at the Fukushima plant is one of three reactors there that had shut down and lost cooling functions necessary to keep fuel rods working properly due to a power outage from the quake. The facility's Unit 1 is also in trouble, but Unit 2 has been less affected.
On Saturday, an explosion destroyed the walls of Unit 1 as operators desperately tried to prevent it from overheating and melting down.
Without power and with its valves and pumps damaged by the tsunami, authorities resorted to drawing sea water mixed with boron in an attempt to cool the unit's overheated uranium fuel rods. Boron disrupts nuclear chain reactions.
The move likely renders the 40-year-old reactor unusable, said a foreign ministry official briefing reporters. Officials said the sea water will remain inside the unit, possibly for several months.
However, experts view the sea water method as a desperate measure, saying the dousing would need to continue nonstop for days.
Officials placed five reactors, including Units 1 and 3 at Dai-ichi, under states of emergency Friday after operators lost the ability to cool the reactors using usual procedures.
An additional reactor was added to the list early Sunday, for a total of six - three at the Dai-ichi complex and three at another nearby complex. Local evacuations have been ordered at each location. Japan has a total of 55 reactors spread across 17 complexes nationwide.
Japan struggled with the nuclear crisis as it tried to determine the scale of the Friday disasters, when an 8.9-magnitude earthquake was followed by a tsunami that ravaged its northeastern coast with breathtaking speed and power.
Thousands are unaccounted for and are feared dead. In Miagyi, one of the worst hit areas, the death toll is likely to exceed 10,000.
The prime minister took to the airwaves, urging calm in the face of monumental disaster.
"Please, I ask each one of you, please, have such determination to deepen your bond with your family members, neighbors and people in your community to overcome this crisis so that Japan can be a better place," said Prime Minister Naoto Kan.
Kam also said this is the worst crisis Japan has faced since World War II. Millions of the country's residents are without electricity, clean water, basic services and are running out of food quickly.
The Associated Press contributed to this story.