Capt. Wisam Eid, 31, worked for an intelligence unit widely viewed as being allied with anti-Syrian ruling coalition leader Saad al-Hariri and which was frequently criticized by the Syrian-backed opposition.
Interior Minister Hassan Sabei said there were two previous attempts to kill Eid, who took up his post after a roadside bomb wounded his predecessor, Samir Shehadeh, in 2006.
The assassination is the latest in a wave of bombings and political killings in Lebanon over the past three years. The turmoil caused by the killings has fueled the country's worst political crisis since the 1975-1990 civil war.
"Eid had a role in all the files linked to terrorist bombings," Brig. Gen. Ashraf Rifi, the national police chief, told reporters at the scene of the bombing that also left 38 people wounded.
Security sources told Reuters that Eid was responsible for tracking mobile telephone communications made by attackers in previous assassinations.
The explosives-packed car was parked on the side of a road near an overpass in the Christian suburb of Hazmiyeh. It was detonated by remote control as Eid's car drove by, Reuters reported.
Firefighters sprayed water over blazing cars and smoking debris. A charred corpse was visible in one car. Body parts were strewn on the road. Dozens of vehicles were damaged in the blast, which ripped a large crater in the road, according to media reports.
Eid's police intelligence unit has been closely involved in the U.N.-led investigation into the 2005 assassination of Saad al-Hariri's father, former Lebanese Prime Minister Rafik al-Hariri, and in a crackdown on al-Qaida-inspired militants.
Friday's attack occurred 10 days after a car bomb damaged a U.S. diplomatic car in Beirut, killing three people and wounding 16. Last month a car bomb killed the army's chief of operations, Francois Haj, in east Beirut.
The majority coalition accuses Syria of being behind Hariri's assassination and many of the more than 30 bombings that have hit Lebanon in the past three years, often directed against anti-Syrian politicians and journalists.
Damascus, which denied any involvement, condemned the latest attack, saying it "targets Lebanon's security and stability".
White House spokeswoman Dana Perino condemned it as "an attack by those who seek to undermine Lebanon's institutions." Asked if the White House believed Syria might be involved, Perino said she didn't know."I couldn't put it past them, but I couldn't say that for sure," she said.