Agents at a warehouse in Dearborn were trying to arrest Luqman Ameen Abdullah, 53, on charges that included conspiracy to sell stolen goods and illegal possession and sale of firearms. Ten followers listed in a criminal complaint were also being rounded up in the area.
Abdullah refused to surrender, fired a weapon and was killed by gunfire from agents, FBI spokeswoman Sandra Berchtold said.
In a court filing, the FBI said Abdullah, also known as Christopher Thomas, was an imam, or prayer leader, of a radical group named Unmah whose primary mission is to establish an Islamic state within the United States.
No one was charged with terrorism. But Abdullah was "advocating and encouraging his followers to commit violent acts against the United States," FBI agent Gary Leone said in an affidavit.
"He regularly preaches anti-government and anti-law enforcement rhetoric," Leone said. "Abdullah and his followers have trained regularly in the use of firearms, and continue to train in martial arts and sword fighting."
Leone said members of the national group mostly are black and some converted to Islam while in prisons across the United States.
"Abdullah preaches that every Muslim should have a weapon, and should not be scared to use their weapon when needed," Leone wrote.
It was not immediately clear how many of the other 10 suspects were in custody.
The group believes that a separate Islamic state in the U.S. would be controlled by Jamil Abdullah Al-Amin, formerly known as H. Rap Brown, who is serving a life sentence in a federal prison in Colorado for shooting two police officers in Georgia in 2000, Leone said. Al-Amin, a veteran of the black power movement, started the group after he converted to Islam in prison.
"They're not taking their cues from overseas," said Jimmy Jones, a professor of world religions at Manhattanville College and a longtime Muslim prison chaplain. "This group is very much American born and bred."
The movement at one time was believed to include a couple of dozen mosques around the country. Unmah is now dwarfed in numbers and influence by other African-American Muslim groups, particularly the mainstream Sunnis who were led by Imam W.D. Mohammed, who recently died.
By evening, authorities still were working the scene near the Detroit-Dearborn border and the warehouse was surrounded by police tape.
The U.S. attorney's office said an FBI dog was also killed during the shootout.
Abdullah's mosque is in a brick duplex on a quiet, residential street in Detroit. A sign on the door in English and Arabic reads, in part, "There is no God but Allah."
Several men congregated on the porch Wednesday night and subsequently attacked a photographer from The Detroit News who was taking pictures from across the street. Ricardo Thomas had his camera equipment smashed and had a bloody lip from the attack.
Imad Hamad, regional director of the American-Arab Anti-Discrimination Committee in Dearborn, said the FBI had briefed him about Wednesday's raids and told him they were the result of a two-year investigation.
"We know that this is not something to be projected as something against Muslims," Hamad said.
Associated Press writers David Runk, Corey Williams, David N. Goodman and Rachel Zoll contributed to this story.