The Argyle St area in central Whanganui was cordoned and searched by the Armed Offenders Squad after reports of gunshots on Monday night.
A spokeswoman said Whanganui police received reports of gunshots ringing out about 11.10pm.
The spokeswoman said no firearms were found in the area. However, a car was badly smashed up with broken windows.
An Argyle St address was searched and the occupants were spoken to by police. There were no arrests or injuries.
An Argyle St resident, who asked not to be named, said she was just drifting off to sleep when she heard "an enormous bang".
"I first of all thought 'Was that a gun?'," she said. "Then I heard a lot of shouting and more fainter bangs of the same sort then the sound of a window breaking. It sounded like someone was hitting something really hard, like a tin fence or a car bonnet. It only lasted a few minutes but it was enough to keep me awake for a couple of hours.
"There was a lot of traffic up and down the street over the next hour or so which could have been the police. It's a really noisy neighbourhood - there's always something going on around here."