Mohammad Abbas, a local police officer, said the city was tense on Wednesday after the people rampaged through a poor neighbourhood overnight smashing dozens of vehicles.
Lahore is Pakistan's second-largest city and the capital of Punjab province lying close to the Indian border.
The trouble erupted late on Tuesday when copies of the Muslim holy book were found in a drain in the Bhatta area on the fringes of the sprawling city.
"The news of the desecration of the Quran spread quickly in the neighbourhood and within no time some three to four thousand people took to the streets shouting slogans against the desecration," Abbas said.
He said the crowd armed with bamboo sticks turned violent, setting fire to two cinemas and attacking public and private property.
"Police used a mild baton charge to restore order, but the situation is very tense," he said.
Abbas said police have registered a case against unknown people under the country's blasphemy laws.