Officers were called to Standiforth Lane at 9pm following reports by a member of the public that a gun had been fired.
Police say the incident involved several men.
They also believe that two cars were involved and a shotgun may have been fired.
Det Insp Vanessa Rolfe, of Kirklees CID , said: “One man who was arrested has been released without charge and enquiries are continuing."
The alley, which runs next to Standiforth Recreation Ground, was cordoned off on Saturday night and yesterday (Sun) officers spent hours combing Standiforth Rec looking for evidence.