A chapel has been burned down and dozens of headstones knocked over in an early morning attack on the Jewish section of Makara Cemetery, on the western outskirts of Wellington.
Detective Sergeant Tim Leitch, who is heading the investigation into the attack, said 90 headstones had been pushed off their bases.
Mr Leitch said the chapel had been destroyed.
Police had not found any signs of desecration around the graves, other than the headstones being knocked over, but it was still early in the scene examination.
The incident comes three weeks after about 16 historic headstones were smashed on Jewish graves at central Wellington's Bolton Street Cemetery
Asked if there appeared to be a connection between the two attacks, Mr Leitch said: "At this stage I wouldn't like to say.
Mr Leitch said the fire was reported about 4am by a newspaper delivery person who saw a glow in the sky.
When firefighters arrived just before 4.20am, they found the chapel "well alight".
Fire investigators have cordoned off the scene, and Wellington City Council staff responsible for cemeteries are in attendance.
Another police officer, Sergeant Dexter Trail, said police were not sure if last month's attack and this morning's attack were "one and the same".
He said the first attack, in which headstones were desecrated with swastikas and Nazi slogans gouged into the ground, was still being investigated.
The attack happened just hours after the jailing of suspected Israeli spies Eli Cara and Uriel Kelman for passport fraud.
At the time, New Zealand Jewish Council chairman David Zwartz linked the desecration to their sentencing.
Mr Leitch said police particularly wanted to hear from anyone who saw people or vehicles in the rural area overnight, particularly around 4am.
Police believed those responsible would have needed a vehicle to get to the cemetery.
"There were probably a number of people involved, and they would have been here for a long time," he said.
Acting Prime Minister Michael Cullen condemned the vandalism and said it was particularly concerning as it followed the earlier attack in Wellington's Bolton Street cemetery.
"Racism of any sort is ugly and unforgivable and has no place in New Zealand," he said.
Wellington Mayor Kerry Prendergast described the attack as an "apalling act of vandalism'.
Ms Prendergast said the council would reinstate the 90 headstones affected, and increase security at both Makara and Karori cemeteries.
Attacking the dead was a cowardly and contemptible act, she said, and she was disgusted and ashamed that it had happened in the capital.
"Most Wellingtonians will be as sickened as I am by this act of cowardice and my sympathy goes out to the Jewish community today, especially those people who have been affected by this terrible event.
"I have always been proud of the fact that Wellington is a tolerant, caring community. I call on Wellingtonians today to demonstrate this by supporting our Jewish community and condemning this act of violence and hatred."