Around 50 military trucks were deployed in Meiktila, where homes and mosques have been torched by mobs armed with knives and sticks in three days of communal rioting.
"We do not know what we will do in the future. Most of us want to go back home if there is peace under the military," said one displaced man at the town's sports ground, which has become a makeshift refuge for hundreds of local Muslims.
"There was no proper control in recent days. We welcome the soldiers coming into the town, they can give us security."
The clashes are the latest sign of worsening tensions between Muslims and Buddhists, presenting a serious challenge for the quasi-civilian regime as it looks to reform the country after decades of iron-fisted military rule.
Violence in Meiktila, 130 kilometres (80 miles) north of the capital Naypyidaw, began on Wednesday after an apparent argument in a gold shop spiralled into pitched battles.
Mosques have been reduced to ashes, while gangs of young men, including monks, have roamed the streets.
It is the worst communal violence since a wave of clashes between Buddhists and Muslims in the western state of Rakhine last year that left at least 180 people dead and more than 110,000 displaced.
The state of emergency order, signed by President Thein Sein, is designed to enable the army to help restore order and is a significant move in a country trying to emerge from the legacy of junta rule, which ended two years ago.
Meiktila remained tense on Saturday, although no new clashes were reported.
"We do not have an exact death toll yet as we are still trying to collect the figures," a senior government official in Meiktila town told AFP, adding that troops had brought relative calm to the area and a clean-up operation was under way.
Although the chaotic nature of the situation made precise casualty numbers difficult to obtain, local police said Friday that at least 20 people have died, while state media on Saturday put the official death toll at 11 with 39 injured.
A report in the English language New Light of Myanmar said more than 150 homes and 13 religious buildings were damaged in the unrest.
The United Nations, US, Britain and rights groups have called for calm and dialogue between communities amid fears that the violence could spread.
The office of the European Union's top diplomat, Catherine Ashton, said in a statement Saturday: "The EU urges the authorities to protect the civilian population from violence, and to investigate the causes of this disturbing state of affairs.
"The High-Representative encourages all parties and particularly community and religious leaders to call for an end of violence."
Journalists in the town have seen the charred remains of bodies on the roadside, while one group of reporters was threatened at knife-point by a group of men and monks who forced them to hand over their camera memory sticks.
Kyaw Kyaw, a 27-year-old Muslim religious leader who has lived in the town since his childhood, said he was not sure what was behind the sudden explosion of violence.
"We could not take anything when we left our homes. We had to run for our lives... We have been living with Buddhists for many years. I am very upset about what has happened," he said on Friday.
Myanmar's Muslims -- largely of Indian, Chinese and Bangladeshi descent -- account for an estimated four percent of the population of roughly 60 million, although the country has not conducted a census in three decades.
Religious violence has occasionally broken out in the past in some areas across the country, with Rakhine state a flashpoint for the tensions.
Since violence broke out there last year, thousands of Muslim Rohingya -- including a growing number of women and children -- have fled the conflict in rickety boats, many heading for Malaysia