Dozens of armed police were seen patrolling the tense streets of Mandalay where shops were shuttered after angry mobs rampaged through the normally bustling central metropolis for two consecutive nights.
Two men, one Buddhist and one Muslim, were killed in violence that continued into this morning, police said.
It is the latest of several waves of sectarian unrest that have exposed deep religious tensions in the Buddhist-majority nation as it emerges from decades of military rule.
Inter-communal violence has overshadowed widely praised political reforms since erupting in 2012. It has largely targeted Muslims, leaving at least 250 people dead and tens of thousands homeless.
Buddhist rioters, some armed with sticks and knives, attacked a Muslim teashop on Tuesday and surrounding property in downtown Mandalay after an accusation of rape, according to local police.
Security forces fired rubber bullets in the early hours of Wednesday to try and disperse the crowds.
Police said the two men were killed in separate attacks overnight. About 10 other people were injured.
In a monthly radio address, Myanmar's reformist President Thein Sein said the country was a "multi-racial and -religious nation" that could only maintain stability if people live "harmoniously".
"For the reform to be successful, I would like to urge all to avoid instigation and behaviour that incite hatred among our fellow citizens," he said, according to an official transcript.
But the sectarian conflicts have provided a major test for his administration and prompted warnings that the country's fragile transition towards democracy could be at risk.
