"An 18-year-old man has died in hospital," Malmo police said in a statement, adding that four others were hospitalised.
According to witnesses, 15-20 shots were fired in quick succession and people could then be seen loading injured men into private vehicles.
The shooting occurred on Drottningatan, only blocks away from a police station.
Witnesses were quoted as saying that at least one attacker was armed with an automatic weapon.
Swedish police say the motive for the shooting is still unknown. It is being treated as murder and attempted murder.
