The driver of Yadav's SUV was critically injured in the explosion that occurred near Dhab in Chandwara police station area on Koderma-Hazaribag border.
Mr Yadav, 50, died on the spot while his bodyguard and the driver were seriously injured in the attack, Superintendent of Police Shivani Tiwari said.
The bodyguard succumbed to his injuries in a hospital here while the driver was shifted to a hospital in Ranchi, she said.
Mr Yadav's SUV was attacked when he was returning from a stone crusher unit in Hazaribag district that he owned.
The reason behind the attack is being investigated, Tiwari said.
She said the Congress leader had suffered serious injuries when unidentified gunmen fired at him about three months ago and he was recently released from the hospital.