Shots rank out at the church in the Grossborstel area, with the first emergency made at around 2015 GMT, a police spokesman at the scene said.
“Several people were seriously injured, some even fatally,” police said on Twitter.
“At the moment there is no reliable information on the motive of the crime,” they added, urging people not to speculate.
Police alerted people to an “extreme danger” in the area using a catastrophe warning app.
Residents must stay indoors and avoid the area, police said, adding that streets surrounding the church have been cordoned off.
Police did not give an exact toll, but several German national media said at least six people were killed.
Officers were able to access the site quickly after distress calls came in, a spokesman said.
The first police at the scene found several lifeless bodies and seriously wounded people.
They also heard a shot in the “upper part of the building” before finding a person in the area where it rang out.
“We have no indications of a perpetrator on the run,” said the police spokesman.
Instead officers have “indications that a perpetrator may have been in the building and may be even among the dead.”
The spokesman added that the person uncovered in the upper part of the building was “possibly” the perpetrator.
The port city state’s mayor Peter Tschentscher expressed shock at the shooting on Twitter.
Sending his sympathies to families of the victims, he said the emergency services were doing their utmost to clarify the circumstances.
hit by attacks
Germany has been rocked by several attacks in recent years, both by jihadists and far-right extremists.
Among the deadliest committed by Islamist extremists was a truck rampage at a Berlin Christmas market in December 2016 that killed 12 people.
The Tunisian attacker, a failed asylum seeker, was a supporter of the Islamic State jihadist group.
Europe’s most populous nation remains a target for jihadist groups in particular because of its participation in the anti-Islamic State coalition in Iraq and Syria.
Between 2013 and 2021, the number of Islamists considered dangerous in the country had multiplied by five to 615, according to interior ministry data.
But Germany has also been hit by several far-right assaults in recent years, sparking accusations that the government was not doing enough to stamp out neo-Nazi violence.
In February 2020 a far-right extremist shot dead 10 people and wounded five others in the central German city of Hanau.
And in 2019, two people were killed after a neo-Nazi tried to storm a synagogue in Halle on the Jewish holiday of Yom Kippur.
