The incident took place last night at Adarsh Nagar when G Veerapan, with whom the woman was allegedly having an illicit relation, poured kerosene on her and set her ablaze, according to Machilipatnam Police Sub-Inspector A G S Murthy.
The woman and her neighbour recently had an altercation over a petty dispute after which the latter took the step in a fit of rage, police said.
The victim, who has separated from her husband, was living with her three children.
Machilipatnam Police has registered a case and launched a manhunt to nab the accused, who is absconding.