A man armed with a hatchet and a pellet gun unleashed pepper spray at audience members inside a cinema before being shot dead by police as he tried to escape.
The attacker, Vincente David Montano, 29, of Nashville, was carrying two backpacks, one of which hung from his chest, and he wore a surgical mask, possibly to protect himself from the pepper spray he unleashed during the screening of Mad Max: Fury Road.
Metro Nashville Police spokesman Don Aaron said three people were blasted with the spray and treated. There were eight people in the cinema, including the assailant.
As he fled out the back, Montano encountered a SWAT team and was shot dead, Mr Aaron said.
About two dozen gunshots could be heard in a 10-second period in raw video footage posted online by WKRN TV.
Police initially said that Montano had been armed with a gun and that he exchanged fire with the first responding officer, but Mr Aaron later clarified that he had been carrying a pellet gun.
The violence at the Carmike Hickory 8 complex comes two weeks after a 59-year-old drifter opened fire inside a cinema in Lafayette, Louisiana, fatally shooting two before killing himself.
It also happened while jurors in Colorado decide whether the man who killed 12 and injured 70 others during a cinema shooting in 2012 should receive the death penalty.
One of the people hit with the pepper spray in the cinema also had a cut that was caused by a hatchet, Mr Aaron said.
He identified the victim only as Steven because he said the man did not want to bring any more attention to his family.
"The only thing that I would like to say is that I'm eternally grateful to the Metro Police Department for their fast response today, and the fact that no one else got injured other than the person who did this," Steven said.
"And I would also like to thank all the citizens who gathered around us, helped my daughter when we were pepper sprayed. That kind of gives me a little bit more faith in humanity again."
One of Montano's two backpacks was detonated and then found to contain a fake bomb, Mr Aaron said.
He said investigators were going through a second backpack that Montano left at the cinema. No one was taken to a hospital.
The only person shot was Montano, whose motive was still unclear, Aaron said.
"This individual has had significant psychiatric or psychological issues," he said. "He had been committed four times, twice in 2004 and twice in 2007."
Montano was also arrested in Murfreesboro in 2004 for assault and resisting arrest.
The cinema complex sits in a commercial area in Antioch, a middle-class community in the southern part of Nashville.