Police are appealing for witnesses after gunshots were reportedly fired in Deighton.
Detectives say a gang of men were seen in the Chestnut Street area between midnight and 1am and a gun was thought to have been fired.
Armed police were sent to the estate and the street was cordoned off.
Police dog units, supported by the force helicopter, were also despatched.
It is believed no one was hurt.
Det Insp George Bardell, of Kirklees CID, said: “We are conducting enquiries into this reported incident and would like to speak to anyone who saw suspicious behaviour between 12am and 1am in the Chestnut Street area, including Woodhouse Hill and Riddings Road.
“Anyone who has information can contact Huddersfield CID on 101 or the independent Crimestoppers charity, anonymously, on 0800 555 111.”
The road has been closed for forensic examination and local residents have spoken of what it’s like living on the estate.
Stephen Emsley, whose house was within the police cordon, said: “There is all sorts going on up there – anti-social behaviour, tipping, loud music.
“It builds up to people thinking they can get away with stuff. I feel like there are drugs gangs up here.
“The whole area is falling to bits. We need CCTV and undercover police. It’s like the wild west.”
Another resident, who did not want to be named, told of her fear at hearing gun shots.
“A gun shot woke me up,” she said. “I went to my window and saw a gang of lads going past. I’m not sure how many.
“I was very scared because I live on my own. The police came within 20 minutes but I just went back to bed.
“It’s mostly middle aged people who live on here and it’s usually a quiet street.”
In unrelated investigations, police would like to speak to the people pictured in the image gallery below. The people pictured in the images may be witnesses as well as suspects. If you recognise anyone, contact police on 101 quoting the reference number on the image caption.