Two Afghan policemen also died and two others were wounded in the explosion in the mountainous Shorabak district of Kandahar province, 12 miles (19 kilometers) from the Pakistan border, said Gen. Abdul Raziq, chief of the Afghan border police in the province.
"Two months ago, we cleared this area of terrorists, but still they are active there," Raziq said.
The Taliban claimed responsibility for the blast.
"A bomb was planted for them in a field," Taliban spokesman Qari Yousef Ahmadi told The Associated Press in a telephone call.
A U.S. official, speaking on condition of anonymity because he was not authorized to disclose the information, confirmed that seven American service members died in the bombing.
The international military coalition reported that one additional NATO service member was killed Thursday when a helicopter crashed in the east.
U.S. officials said seven American soldiers were killed in the bombing. NATO said an eighth soldier was also killed, but his nationality was not immediately released.
It was the deadliest day for coalition forces in Afghanistan since April 27, when a veteran Afghan military pilot opened fire at Kabul airport and killed eight U.S. troops and an American civilian contractor.
Thursday's blast was the worst single attack against NATO forces by one of the Taliban's crude, homemade bombs since October 2009. Seven soldiers from a unit based in Fort Lewis, Washington, died Oct. 27, 2009 when their vehicle hit a roadside bomb in Arghandab district, also in Kandahar province.
"It was a big, powerful blast," said Gen. Tefeer Khan Ghogyaria, who oversees Afghan border police in three provinces in the south. "A container of explosives was placed in the ground and it exploded when the NATO forces were passing. They were on a foot patrol."
Roadside bombs killed 268 American troops in Afghanistan last year, a 60 percent increase over the previous year, even as the Pentagon employed new measures to counter the Taliban's makeshift weapon of choice. Defense officials attributed the rise in casualties to the surge in U.S. forces in Afghanistan last year.
The number of U.S. troops wounded by what the military terms improvised explosive devices also soared, according to the most recent U.S. defense figures. There were 3,366 U.S. service members injured in IED blasts — up from the 1,211 hurt by the militants' crudely made bombs in 2009, the figures show.
Officials with the Pentagon's Joint Improvised Explosive Device Defeat Organization, based outside Washington, has said that additional explosive sensors, bomb analysts and specially trained dogs have helped battle the roadside bombs.
Last year, the Pentagon provided $495 million to buy 34 tethered surveillance blimps that give troops a bird's eye view of certain areas and sent in more unmanned surveillance aircraft so route-clearance patrols would have the benefit of full-motion video. The Pentagon also delivered more than 5,000 hand-held bomb detectors, improved training and sent additional equipment to Afghanistan to counter the threat.
Southern and eastern Afghanistan are the most volatile areas in Afghanistan.
Tens of thousands of U.S., NATO and Afghan forces have been working for months to rout the Taliban from their strongholds in the south. The Taliban have retaliated with targeted assassinations of Afghan officials and attacks on Afghan and coalition forces. Eastern Afghanistan, along the Pakistan border, also has been the scene of heavy violence.
On May 1, insurgents declared the start of a spring offensive against NATO and the Afghan government. NATO has been expecting the Taliban to stage a series of spectacular and complex attacks, and the group has already carried out a number of them recently.
The effectiveness of the Taliban's long-awaited spring campaign, code-named Badr after one of the Prophet Muhammad's decisive military victories, could affect the size of President Barack Obama's planned drawdown of U.S. troops in July. Gen. David Petraeus, the top U.S. and NATO commander in Afghanistan, has said the size of the withdrawal will depend on conditions on the ground.
The alliance has committed itself to handing over control of security in the country to Afghans by 2014.
Thirty-eight international service members have been killed so far this month, including at least 13 Americans. So far this year, 189 coalition troops have died in Afghanistan.