Mobs went on the rampage on Tuesday in the northern city of Kano after a protest march demanding a clamp down on Christian militia responsible for last week's massacre in the remote farming town of Yelwa.
Perturbed by the spiraling violence, President Olusegun Obasanjo urged Muslim leaders to show restraint.
Witnesses to the day's violence saw rioters stopping vehicles and selecting non-Muslims to be killed.
Kano, 250 miles north of capital Abuja, has been the scene of bloody religious riots in the past.
Thousands of Christians took refuge in a police academy building on the outskirts of the town to escape rioters armed with cutlasses and clubs.
"They are burning houses and just killing Christians"
"They are burning houses and just killing Christians," said Gloria Butpan, a housewife.
Calling for calm at a meeting with Muslim clerics in Abuja, President Obasanjo said " I will appeal to you to restrain our Muslim brothers … because if you go for an eye for an eye, this country will be bloody."
Survivors of last week's attack on Yelwa town said they buried 630 corpses after a two-day assault by heavily armed Christian militia. It was not possible to verify the figure independently, but police said "hundreds" were killed.
A country of 130 million, Nigeria is split equally between Muslims and Christians.
The Yelwa massacre was the latest outbreak of violence in a conflict dating to 2001 when more than 1000 people were killed in fighting in the town of Jos.
At least 1000 more have been killed in the past three months.