Armed police were called to Heysham after a man fired a gun at a property and then fled.
An eye-witness told Beyond Radio she heard a loud bang and then saw a man running into Sefton Road from Heysham Road carrying what appeared to be a rifle.
Police said that nobody is believed to have been hurt in the incident on Monday afternoon.
Armed officers were called to the scene and will remain in the area for some time.
Police received the report of gunfire on Heysham Road at around 4pm on Monday.
A spokesperson said: "It is believed a man shot at an address before fleeing the area."
A woman, who was in the area at the time with her son, spoke to Beyond Radio.
"We were driving on Heysham Road and there was this really loud noise," she said.
"I thought it was scaffolding falling off a building, but my son said it sounded like a shot.
"Then we saw this person with a rifle, quite a big one, (dressed) all in black, running into Sefton Road. We called 999 to report it."
A police cordon is in place in the area, police vehicles have been seen patrolling the streets and the police helicopter was also out.
Det Insp Dylan Hrynkow of Lancaster CID said: “We appreciate that this incident will be extremely concerning for the local community, however officers, including armed officers, have attended and will remain in the area for some time.
“Over the coming days we will also have high-visibility uniformed patrols in the area and anybody with concerns is welcome to speak to them.
“Our enquiries are very much under way to establish what occurred and anybody with information is asked to get in touch with us straight away. Whatever information you have, however small, please tell us.”
Anybody with information is asked to call 101, quoting log 937 of August 1st.
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