A woman and her two children were among the victims of the attack at the Redeemed Christian Church of God, the sources told CNN.
Though no one has claimed responsibility for Sunday's attack, the method, target and location are consistent with past attacks thought to be perpetrated by the militant group Boko Haram.
Potiskum, the commercial hub of Yobe state, has been the site of multiple deadly attacks blamed on the group.
In 2015, militants have targeted Potiskum on at least four occasions, police said: In January, three people were killed and 43 were injured when two female suicide bombers targeted the mobile phone market; the following week, another suicide attack killed four people and injured 48 at a bus station in Potiskum.
Another suicide attack at a bus station in February killed 17 people and injured 27; and in May, a gunman wearing a suicide vest attacked the College of Administrative and Business Studies there.
In addition to schools and police and government buildings, Boko Haram has been known to target churches, as evidenced by a rash of church attacks in June 2013 that left more than 50 people dead and a November 2011 string of attacks that included assaults on 11 churches.