Security personnel at the shopping center where the McDonald's is located extinguished the blaze, police said. The restaurant was closed during the pre-dawn attack, and nobody was hurt.
The shopping mall is near a university where leftist protesters set up their headquarters last month after police drove them out of city's main plaza, which they had occupied for five months in a bid to force the resignation of the Oaxaca state governor. Those activists attacked a Burger King restaurant in the same mall with gasoline bombs last week.
However, leaders of the movement, known as the Oaxaca People's Assembly, denied their members were responsible for Sunday's attack.
McDonald's was at the center of controversy here in 2002, when artists and community groups forced the chain to abandon plans to open a franchise in Oaxaca's picturesque colonial main square, saying it would hurt the city's cultural identity.
Oaxaca's conflict started as a teachers' strike for higher pay. It expanded into a fight to oust Gov. Ulises Ruiz, with leftist protesters seizing the city center, building barricades, burning buses and seizing radio stations to call for revolution.
The unrest drove foreign tourists away from the city, one of the country's top attractions.
On Saturday, the Roman Catholic bishop of Oaxaca declined a request to give asylum or sanctuary to People's Assembly leaders who fear arrest. Bishop Jose Luis Chavez Botello said the church did not have the resources to guarantee the safety of the protest leaders but was trying to facilitate understanding and dialogue between the two sides.
Many of the striking teachers recently agreed to accept pay increases and return to work. Federal police have retaken the city center, but violence has persisted elsewhere, including clashes between police and protests that injured 30 people last week.