The PSNI is treating graffiti in Limavady as a "sectarian hate crime" after kerbs and a wall were painted green, white and orange.
The incident happened between 23:00 and midnight on Sunday.
"IRA" was sprayed on a road sign and Irish tricolours were also put up on the Ballyquin Road.
It comes a week after "sectarian graffiti" was daubed on a Catholic church.
Ch Insp Mark McClarence said the painted kerbstones and the IRA slogan were being treated as a hate crime, and appealed for anyone with information to come forward.
He said police had also received reports about the tricolour flags being flown, but added that "the removal of flags is not the responsibility of the PSNI.
"Police will only act to remove flags if there are substantial risks to public safety.
"However, we fully understand the flying of flags can cause frustration in some communities.
"It is our experience that such issues are most successfully resolved through engagement and collaborative working between local communities and their representatives, and police are always ready and willing to be a partner in such arrangements."
Sinn Féin MLA Caoimhe Archibald said: "I condemn outright the painting of the kerb stones green, white and orange in Limavady.
"There has been an increase in the numbers of flags, including paramilitary flags, being flown and a surge in kerbs painted red, white and blue in the town.
"Sinn Féin has consistently stated that kerbs and flags should not be used to mark territory."
DUP councillor Aaron Callan told BBC News NI: "I strongly condemn the recent painting of kerbs and erecting of flags on the Ballyquin Road.
"The recent graffiti attacks in Limavady doesn't represent anyone in our community.
"The flying of paramilitary flags and painting of kerb stones does not strengthen the union or bring about a united Ireland. It only creates ill feeling with our neighbours and our town.
"Limavady is better than the recent negative news it has been receiving."