A report of a man wielding a gun during a fight at a Nelson house sparked school lockdowns and a major response by armed police.

Police and the Armed Offenders Squad responded to a report of men fighting in Brunner St, Nelson South, about 9:30am on Friday. Nelson Bays area commander Inspector Mat Arnold-Kelly said a gun was allegedly pulled out during the argument.

"We received a call in relation to a fight on the street and there was some suggestion of a firearm involved so we had to take necessary precautions for the safety of the community and our officers."

Marion van Dijk Police near the corner of Motueka and Campbell streets respond to a reported gun incident in Brunner St on Friday.

As at Friday afternoon, police were talking to three men about the incident but no arrests had been made.

Police had not found a gun but Arnold-Kelly said inquiries were ongoing.

A witness said she saw AOS officers forcing up to four men to lay down on the road in Brunner St. She was told by police to stay inside the house.

Two young men were taken from the scene in an unmarked police car about 11.30am.

Police continued to search a property in the street into the afternoon.

Cordons manned by armed police were put in place at the entrances to Motueka and Tukuka streets, preventing some people from getting to their homes for up to two hours on Friday morning.

Nelson College, Hampden St and Nelson Intermediate schools were in "lock down" and Nelson Hospital was on alert.

Nelson College headmaster Gary O'Shea said there was "no direct threat" but schools had taken advice from police.

Waimea Rd's On the Spot Convience Store owner Balvant Maganlal said he heard "lots of sirens and cop cars millling around".

"It's a bit scary, this never normally happens here."

Other people in the area said they didn't hear or see the fight and the heavy police presence was the only sign that something had happened.