A Papua New Guinea government house was burnt to the ground and several vehicles were badly damaged outside Vanimo town when angry villagers went on a rampage on Wednesday.
West Sepik provincial police commander Joe Poema told the Post Courier newspaper the situation was still very tense and police were monitoring the situation closely.
Mr Poema said the riot stemmed from a drunken brawl that turned nasty last week, resulting in the hospitalisation of a man from Lido village and a subsequent protest by the victim's kinsmen.
He said the relatives of the victim failed to report the matter and instead took the law into their own hands.
Police had been able to keep the situation under control to allow police investigations to proceed until Wednesday afternoon, when Lido villagers numbering up to 500, went on a rampage.
Mr Poema said the villagers demanded a meeting with provincial authorities and while negotiations were going on, another group of villagers set about destoying government and private property on the outskirts of town.
While condemning the actions of the villagers, the Police Commander said they would investigate both incidents before making any arrests.