"Mobs had attacked him with sharp weapons at his carpentry workshop", a police official told the AFP news agency. Muslim political parties said at least one person died in the riots but the security officials have refused to confirm the death.
In a televised address, Police Chief Chandana Wickramaratne warned that officers would respond to rioters with maximum force. They threw rocks and Molotov cocktails at Muslim-owned businesses, attacked Muslim homes and ransacked the town's main mosque.
Police said they fired in the air and used tear gas at several places to deter people attempting to attack mosques.
"The curfew in the three districts will be lifted at 6.00am (0130 BST) on Tuesday while in the rest of the country, a curfew will be imposed from 9.00pm till 4.00am", police said in a statement.
Wickremesinghe said the unrest would hinder investigations into the April 21 attacks that targeted three Christian churches and three luxury hotels, killing 258 people and wounding almost 500. Amith Weerasinghe who has been arrested on 14 May in connection to the attacks was also one of the people previously arrested, and later released on bail in 2018 for his role in anti-Muslim attacks in Digana.
Authorities also imposed a temporary ban on social-media networks and messaging apps including WhatsApp after a clash in another part of the country was traced to a dispute on Facebook.
A Reuters reporter saw a mob of several dozen young Sinhalese men wielding sticks and rods in what appeared to be a standoff in the town of Madulla in North Western Province.
The flare-up is the worst violence in the three weeks since Sri Lankan Islamist bombers blew themselves up in four hotels and three churches on Easter Sunday. "It is no heroism in attacking Muslims and damaging their property - true heroism is to control and overcome oneself", Ranjith said.
A mob targeted Muslim-owned shops after taking a Facebook post by a shopkeeper to be a threat.
They said there were sporadic incidents of mobs throwing stones and torching motorcycles and cars owned by Muslims.
Islamic State claimed responsibility for the attacks, which were carried out by a local radicalised Muslim group.
Prime Minister Ranil Wickremesinghe said late on Monday he had given powers to the security forces to take strong action against those responsible for anti-Muslim violence.