The incident occurred about 4:15 p.m. at the intersection of Lankershim and Victory boulevards.
It is unclear what led to the shooting, but authorities say a narcotics task force working an undercover operation witnessed an unrelated crime and gunfire rang out.
One suspect was transported to a hospital in stable condition and police apprehended a second suspect.
No officers were injured.
The surrounding streets around Lankershim Boulevard have been shut down while authorities investigate.