The government appealed for calm after the unrest -- the latest in a series of outbreaks of sectarian strife that pose a major challenge to the country's reformist leaders following the end of decades of military rule.
Residents said mobs armed with sticks were roaming the streets of Lashio town in Shan State looking for Muslims today, while an AFP reporter saw two houses ablaze.
A local hospital said it had received four people with slash wounds but their injuries were not believed to be life-threatening.
A 48-year-old Muslim man was arrested over that incident, in which the 24-year-old woman suffered burns but was not in a serious condition, according to state-run broadcaster MRTV.
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A Muslim orphanage, a mosque and several shops were destroyed by rioters, a government official told AFP, requesting anonymity.
Tension remained high as dusk approached today with Muslim residents fearing another night of violence and describing a 30-strong group of armed men on motorcycles cruising Lashio and shouting anti-Muslim slogans.
Another Muslim local called for more soldiers to enforce the curfew, saying the mob of bikers was threatening to "kill any Muslims they see on the road".
"The security is not enough... We are now running for our lives," the resident added. "I have no idea what the township authorities are doing. I'm really scared."
Presidential spokesman Ye Htut appealed for an end to the violence, saying in a posting on his Facebook page it had "no place in the democratic society we are trying to establish".
The violence has exposed deep rifts in the Buddhist-majority country and cast a shadow over widely praised political reforms.
Nyan Win, a spokesman for opposition leader Aung San Suu Kyi's National League for Democracy (NLD), said the party believed outsiders were whipping up the violence in Lashio.
"The people they know that this violence (does) not happen automatically. They know that there's a third person there," he said, without elaborating.
Some monks -- who were among the most vocal pro-democracy supporters during Myanmar's repressive junta era -- have been involved in the violence, while others are spearheading a move to boycott shops owned by Muslims.
Wirathu, a monk from Mandalay responsible for some of the most vitriolic anti-Muslim rhetoric, today posted several graphic pictures apparently of the injured Buddhist woman on his Facebook page.