Colorado Springs police responding to an emergency call tracked down the suspect and returned fire after being shot at, the El Paso County Sheriff's Office said in a statement.
The shootings and the suspect's shootout with police in front of a Wendy's restaurant unfolded about a mile from the U.S. Olympic Training Center in the central Colorado town.
Police said they closed off several streets to investigate the shootings, which spanned at least five city blocks.
"It's going to take quite a few hours for us to work that," said Colorado Springs police spokeswoman Lt. Catherine Buckley.
Buckley said the suspect killed three people before exchanging gunfire with police. She declined to release any details on the shooter or the ages or genders of the three victims.
Authorities said there appears to be no further threat to the Colorado Springs area, which is home to the U.S. Air Force Academy and has a population of about 445,000. No one else was injured in the series of shootings, said El Paso County Sheriff's Office spokeswoman Jacqueline Kirby.
Matt Abshire, 21, told the Colorado Springs Gazette he looked out from his apartment and saw a man with a rifle shoot another person.
Abshire then went outside and saw the shooter open fire and strike two women, one of whom appears to have been shot in the face, he told the newspaper.
Just over three years ago a gunman killed 12 people at a movie theater in the Denver suburb of Aurora in an attack that ranks as one of the deadliest mass shootings in U.S. history.