Dozens had stormed into Mingalar Taung Nyunt township in Yangon looking for what they said were "illegal" Rohingya.
The ensuing confrontation left at least one person injured.
The violence comes as hard-liners from the Buddhist majority become increasingly strident in their opposition to the Muslim minority.
There are an estimated one million Muslims in Myanmar (formerly known as Burma) who self-identify as Rohingya
Myanmar's government sees them as illegal immigrants from Bangladesh - a common attitude among many Burmese. It denies them citizenship and places extensive restrictions on their lives.
According to local media, early on Wednesday Buddhist monks led nationalists into the Muslim neighbourhood, claiming ethnic Muslim Rohingya were there "illegally".
Police broke up the scuffles, firing warning shots to disperse the crowd. Two of those for whom arrest warrants have been issued are monks.
Incitement to commit violence carries a sentence of up to two years in prison.
In recent months, hard-liners had held protests in Yangon (formerly known as Rangoon), stopped Islamic religious ceremonies and most recently forced two schools to close temporarily over accusations they were illegally doubling up as mosques.
The predominantly Buddhist country has a long history of communal mistrust, which was allowed to simmer and was at times exploited, under decades of military rule.
In March, the United Nations human rights council said it would investigate alleged human rights abuses by Myanmar's army against the Rohingya.
Some 70,000 Rohingya have fled Myanmar into Bangladesh in the last six months, and the UN has gathered accounts of gang rapes and mass killings.