The shooting happened around noon at a home in the 900 block of East Hamilton Street.
Police say officers arrived at the scene to find the 3-year-old boy suffering from a gunshot wound.
They rushed him to the hospital but the child ultimately died from his injuries.
Allentown police say the investigation is active and ongoing.
They say there is "no physical threat" to the community.
Anyone with information is asked to contact detectives at 610-437-7721 or the Police Desk at 610-437-7753 (ext 1).
Anonymous text tips can also be sent via the Tip411 App available on the Allentown Police Facebook page or via the Allentown Police Department website.