The shootout occurred at 5am Monday, at an apartment in Sungai Nibong.
The five, believed to be in their 20s, were said to have been involved in the recent spate of shooting cases in the state this year.
Police had been monitoring their activities before moving in on a unit on the 11th floor of the building early Monday.
It is learnt that police have seized three pistols from the scene.
Police officers knocked on the door of the apartment but there was no response. They retaliated when the suspects opened fire from the inside of the apartment.
Inspector-General of Police Tan Sri Khalid Abu Bakar is expected to hold a press conference in the afternoon over the incident.
A recent spate of shootings in the state and various parts of the country have sparked speculation of a gangland war.
On Aug 8, K. Veerappan, a 37-year-old scrap dealer believed to be associated with Gang 36, was shot dead when he stopped the car he was driving near a traffic light in Anson Road.
A motorcyclist rode up and the pillion rider whipped out a pistol and fired 14 shots, 10 of which hit Veerappan's neck, cheek and abdomen.
Earlier the same day, a gunman fired at least six shots at a businessman's bungalow in Jalan Utama. No one was injured in the incident, believed to be a triad's warning to the businessman.
On Aug 9, a third shooting occurred in the state, in Jalan Datuk Keramat, where a 43-year-old bouncer was hit in the left thigh.
A gunman fired seven shots but only one hit the victim, believed to be one of the top leaders of the Si Lian (Four Tyres), also known as Geng 04.
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