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(BBC) Railways Minister Ghulam Ahmad Bilour told reporters that he would pay the reward for the "sacred duty" out of his own pocket.
He suggested the Taliban and al-Qaeda would be eligible for the reward.
His comments came a day after at least 20 people died in clashes between anti-film protesters and police.
"I announce today that this blasphemer who has abused the holy prophet, if somebody will kill him, I will give that person a prize of $100,000," the minister said.
Friday's violence occurred in cities throughout the country, with Karachi and Peshawar among the worst hit.
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