A gunman slipped into an employee going-away party at the largest veterans home in the United States and has taken at least three people hostage.
It lead to a lockdown of the sprawling grounds in California, authorities and family members said.
California Highway Patrol Sergeant Robert Nacke told reporters he knew of no injuries.
Police evacuated the property of the Veterans Home of California after reports of a man with a gun at the facility in Yountville, one of Napa Valley's most upscale towns in the heart of Northern California wine country.
"We do have an active shooter situation with a hostage situation in Yountville," Highway Patrol Officer John Fransen told San Francisco Bay Area news station KTVU-TV.
Larry Kamer told The Associated Press his wife, Devereaux Smith, was at the party and told him by phone that the gunman had entered the room quietly, letting some people leave while taking others hostage.
Ms Smith, a fundraiser for the nonprofit Pathway Home, was still inside the facility's dining hall and was not allowed to leave, he said.
The Pathway Home, a privately run program on the veteran home's grounds, treats veterans of the Iraq and Afghanistan wars with post-traumatic stress disorder.
The Napa Valley Register reported the man was wearing body armour and reportedly armed with an automatic weapon.
Mr Fransen said authorities were working to establish a secure perimeter around the facility, which is home to about 1,000 residents.
An armoured police vehicle, ambulances and several fire trucks were at the scene.
Events manager Elizabeth Naylor, who was working about 10 miles north of the veterans' home, said she heard waves of emergency sirens.
She said she has lived in Yountville since 1995 and is rattled about an incident like this so close to home.
"I don't know the world we live in today, I really don't," she said.
"This is a little community and we all know each other. Napa Valley is a wonderful, beautiful place and to know this is in your background, it's unsettling."
The Napa County Sheriff's Department issued an alert to residents at 10.30am warning them to avoid the area.
The state Veterans Affairs department says the home that opened in 1984 is the nation's largest veterans home, with about 1,000 elderly and disabled residents.
Its website says it offers residential accommodations with recreational, social, and therapeutic activities for independent living.
The grounds also are home to a 1,200-seat theatre, a nine-hole golf course, a baseball stadium, bowling lanes, a swimming pool, and a military Base Exchange branch store.
Yountville is a small town home to wineries such as Domaine Chandon, which is less than a half-mile from the veterans home, and Thomas Keller's famed restaurant The French Laundry, which is about a mile away.
Messages left at both establishments were not immediately returned.