Authorities said the curfew would stay in place for a second night running in the neighbouring resorts of Alutgama and Beruwala as community leaders accused police of doing little to contain Sunday night's violence.
"At least 80 people have been wounded and among them are some police officers too," a police source in the area told AFP by telephone.
"The situation is largely under control, but the curfew was extended as a precaution." Local Muslims accused the police of failing to protect them when followers of the extremist Buddhist Force -- better known as BBS -- started setting fire to businesses after sunset on Sunday evening.
Police fired teargas and imposed a curfew but were unable to prevent several dozen shops and homes being attacked in the two predominantly Muslim towns, around 60 kilometres (37 miles) south of the capital Colombo.
Both areas are popular beach resorts frequented by international tourists, but there were no reports of any foreigners or hotels being caught up in the violence.
President Mahinda Rajapakse, who is currently visiting Bolivia, said in a statement that he would not allow "anyone to take the law into their own hands" and also urged "restraint".
Trouble began when the BBS held a rally to protest a road-rage incident involving a Buddhist monk and Muslim youngsters in the area on Thursday.
Muslims allegedly pelted stones at the rally, triggering the riots.
The latest unrest came weeks after Muslim legislators asked Rajapakse to protect their community from "Buddhist extremist elements" blamed for a recent spate of hate attacks.
Muslims make up about 10 percent of Sri Lanka's 20 million population.
Nationalist Buddhist groups have in turn accused religious minorities of wielding undue political and economic influence on the island.