Two teenagers have been arrested on the mid-north coast of New South Wales after a homemade bomb exploded, causing a bushfire.

Emergency services were called to extinguish the fire, which burnt through a small area of bushland in Port Macquarie around 1.00pm AEDT on Sunday.

Police say the 16-year-old boys had lit the explosive device and thrown it into a vacant lot, which quickly spread.

The two boys had attempted to extinguish the blaze before fire crews arrived.

Investigations are continuing but the pair have been released without charge.