A local police commissioner, Mohammed Indabawa, says an argument over a game of billiards in the town of Tafawa Balewa sparked clashes between Christian and Muslim youths.
The fighting led to the burning of several mosques and churches. Officials say the violence began late Wednesday and continued into Thursday before police restored calm.
Bauchi state is in Nigeria's so-called middle belt, where the mostly Muslim north meets the mainly Christian south.
Nigeria's 140 million people are divided roughly evenly between Christians in the south and Muslims in the north. Periodic clashes between the two sides, mostly in and around the city of Jos, have killed thousands of people in recent years.