Sources say the incident happened at about 7 p.m. Thursday at the Breckenridge Estates mobile home park in Johnson County.
A news release sent out by the Division of Criminal Investigation early Friday morning said two state agents assigned to the Division of Narcotics Enforcement were conducting an undercover operation at the time of the shooting.
According to the release, neither agent was injured in the shooting, but one suspect was killed and another is being treated at an area hospital.
More details are expected to be released Friday as the investigation continues.
