It happened around 6 p.m. Monday on the 3400 block of Emerald Street.
According to Philadelphia Police Chief Inspector Scott Small, at least 25 shots were fired during the shootout.
Inside a home on the block, officers found a 21-year-old man, a 21-year-old woman and a 27-year-old man all suffering from gunshot wounds.
Police say the 27-year-old was placed in critical condition at an area hospital. The other two victims are expected to survive.
Officers found shell casings from a handgun and an AR-15 at the scene.
Chopper 6 over triple shooting in Kensington
According to Small, it is believed that one of the shooters was firing an AR-15 from a Honda vehicle.
"We know one of the shooting victims was in that vehicle and that the AR-15 is still inside of the vehicle. Right where the driver would sit, we found multiple spent shell casings from that AR-15," said Small.
At least one person was taken into police custody. Small says some of the victims may have been involved in the shooting.
"We also believe that some of our shooting victims, maybe two of them, may have also been firing the gunshots. We're not certain at this point. So we're holding them right now as persons of interest," he said.
It's still unclear what sparked the shooting, but police do believe this was a targeted attack.
Anyone with any information is asked to call police at 215-686-TIPS.
Philadelphia police initially stated that four people were injured in the shooting. Police now believe the fourth victim may have been injured in an unrelated shooting.