Police exchanged fire with outraged rioters as thousands gathered for the funerals of 20 killed in a bombing that ripped through a crowded Shia Muslim mosque on Monday.
Angry mobs set fire to vehicles and property, including American fast-food chains, and battled with the police on Tuesday.
Paramilitary forces were put on alert after Monday's bombing which had increased fears of sectarian clashes between Shia and Sunni Muslims.
President Pervez Musharraf, who has enraged many nationals with his support of the US-led war on terrorism, pledged action to stem the wave of bloodletting.
Monday's bombing ripped through the mosque during evening prayers.
The death tally from the blast climbed to 20 on Tuesday, when four of the injured died of their wounds. The injury toll also rose to 75 as reports were collated from various hospitals and clinics.
But Karachi police chief Asad Ashraf Malik said a shootout between rioters and police left three more people dead.
About 10,000 people attended the funerals of the victims of the explosion.
The Imam Bargah Ali Raza
mosque following the blast
They gathered for prayers outside the wrecked Imam Bargah Ali Raza mosque. Many beat their chests as a sign of mourning and chanted "Death to America" and slogans against Musharraf's government.
A few hundred of the mourners started stoning police, who fired tear gas. Rioters set fire to three buses, shops and offices near the mosque.
Malik said mobs set fire to KFC and McDonald's restaurants in the Gulshan-e-Iqbal district, and restaurants, shops and a petrol station were burned in the Ancholi area.
No one has claimed responsibility for Monday's bombing. But Karachi has been wracked by violence between the Sunni majority and Shia minority, and the attack was seen as revenge for the assassination on Sunday of a senior Sunni Muslim cleric, Nidham al-Din Shamzai, that triggered earlier street battles between his supporters and police.
"Everybody who is a Muslim should understand that some elements want to create unrest," said Yousaf Hussain, a Shia leader. "They are the enemy of Pakistan and Islam, and I ask you to understand this conspiracy and show patience."