The 47-year-old victim was found dead inside his co-worker's apartment with wounds on his head and chest, police said.
His wife told officers he had been out drinking with his colleague on Friday night.
She had been unable to reach her husband the following morning.
She contacted police on Sunday after reportedly discovering his body inside his 25-year-old colleague's apartment.
The flat is in the downtown riverside district of Yangon.
"The victim and defendant are school teachers from Horizon International School and they are friends," a local officer told the AFP news agency.
The 25 year-old is being sought by police and remained at large, he added.
The international school did not immediately respond to requests for comment.
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