The shooter was among the dead, Twin Falls Police Chief Matthew Hicks said in a news conference on Saturday. Police were still trying to determine the shooter's identity and motive.
"We believe the threat to the community is over," Hicks said.
He did not yet know exactly how many were killed or wounded, and officials were still in the process of notifying next of kin.
"It was a very chaotic scene."
The shooting was reported on Saturday afternoon near a busy shopping area in Twin Falls.
Earlier in the day police issued a waring, urging people to avoid the area.
"Our department is responding to an active shooter incident in the area of In-N-Out, an alert on Facebook said.
"We are asking all residents and visitors to avoid the area so officers and first responders can work safely."
Before the news conference, Twin Falls County Commissioner Brent Reinke said Sheriff Jack Johnson had told him five people were hurt.
Lane Koehn, 34, said he was at a stoplight near the In-N-Out when he saw a person with an AR-style rifle emerge from the drive-thru. A man with a pistol started firing at the shooter.
He then saw someone in an In-N-Out uniform drag a person, also uniformed, bleeding from a gunshot wound in her chest across the car park.
"She was pretty bad off, but I don't know. I hope she made it," Koehn said.
Koehn said he was told by police to evacuate because the shooter was still active.
The shooter fired at least three or four rounds, he said.
Video taken by a driver from across the street captured a shooter, who appeared to be dressed in black, walking up to a white car carrying a long rifle, opening the driver-side door and popping the trunk.
The person then walked to the trunk and reached inside. At that point the driver who shot the video left quickly, fearing that the man might be getting more weapons.
Twin Falls resident Haley Dodaro, 43, and her mother went to In-N-Out for lunch on Saturday afternoon.
While waiting in the drive-thru line, they saw people running across the road and workers bolting out of the restaurant. At first Dodaro thought there might have been a fire, but then a man directing traffic in a reflective vest said there was a shooter.
"So that's when we knew there was a shooting. People were running out crying and screaming. It was very scary," Dodaro said in a text message to The Associated Press.
Twin Falls, a city of about 56,000 people, is about 200km southeast of the capital Boise.
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