Myanmar's 1-0 defeat to Indonesia late on Monday angered spectators, who threw stones as disappointed players left the pitch in tears.
Some spectators invaded the pitch as others tore down banners and destroyed plastic seats in the stadium in Yangon, video footage showed.
Fans outside set ablaze billboards and SEA Games flags, hats and even their own T-shirts. Rioters threw stones at police, who huddled behind shields and responded with water cannon.
Myanmar has a passionate soccer following but has gained an unsavoury reputation for crowd violence.
FIFA imposed a ban on Myanmar taking part in qualifying for the 2018 World Cup after fans hurled rocks and glass bottles at the referee and the Oman team during a qualifier for the 2014 Asian Cup, held in July 2011.
The world governing body later lifted the ban on appeal but ordered the country to play all their qualifying home games on neutral territory.
The SEA Games is the first significant multi-sport event Myanmar has staged in 44 years.
Monday's rioting will cast a cloud over Myanmar's hosting of a tournament it hoped would showcase the enormous changes it has undergone since the end of five decades of brutal military rule in 2011.