Armed cops were called to Ehremnbuscgatan in the centre of the town in Scania, the country’s most southern county.
They found at least four people had been injured in different locations following the shooting.
Neighbours report seeing people “running outside” at the time.
Witness Marcus Aberg told local media: “I was on my way home from a mate’s house when I heard a couple of shots.
“I carried on walking and saw a couple of guys running away and heard someone yell ‘call the police’.
“I was terrified, it seems like the shooting happened opposite where I live.”
Cops have blocked off a large area of the and are carrying out an investigation outside St Nicholas Church, close to where officers were called to.
At least eight ambulances were spotted in the area.
Police spokesman Fredrik Bratt said: “We got calls from several people who have heard shots in the city.
“When we got there we found several people who were injured in a few different places.”
Brett added: “We have cordoned off the area and are waiting for investigators and police dogs as we interview witnesses.
“That’s all we have at this time, but we are in place and working.
"We must let medics make an assessment when they come in."
The shooting is not believed to be terror-related.
Officers have brought in several people for questioning and are treating the shooting as a murder attempt.
One person has been arrested and five others will be hauled in for interrogation, police have confirmed.
More about: #Sweden