The inflammatory letter, seen by AAP, consisted of a hand-made drawing of a mosque on fire with worshippers inside.
Racist remarks were also scrawled including "scum", "garbage race", "deport Lebanese" and "burn them out."
The letter was sent to Lakemba Mosque in the heartland of western Sydney on Wednesday evening.Â
Tensions have been high since the Bondi terror attack on December 14 when 15 people were killed by gunmen targeting a Jewish Hanukkah celebration.
The secretary of the Lebanese Muslim Association, which oversees the mosque, said the community has been made to feel like second-class citizens.
"It's not just words anymore. People actually want to take action against us and we could have a potential second Bondi attack on our hands," Gamel Kheir told AAP on Thursday.
"This is frightening because it's the country that I love and we now live in a different world."
The second anonymous letter comes after a 70-year-old man was charged in late January with sending threatening letters to the same mosque.
Premier Chris Minns spoke with the association and said there was "no place for hatred or intimidation."
He noted the latest matter was referred to police and is being investigated.
Treasurer Daniel Mookhey told reporters on Thursday the letter was an "outrageous act" that was "un-Australian", and the government was taking the threat seriously.
But Mr Kheir blamed state and federal leaders from the major political parties for not taking the threats seriously enough.
"A token media release doesn't solve the problem," he said.
"The language they use has enabled and strengthened the racist people out there so they can have a cheap shot at the Muslim community."
Cases of Islamophobia following the Bondi attack have surged by 740 per cent, according to the Islamophobia Register Australia
"If we don't address this scourge of racism, then it becomes acceptable," Mr Kheir said.
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