Investigators said the first shots were fired in Maywood when police tried to stop a white vehicle with two suspects inside at about midnight.
"When they approached the vehicle, shots were fired from the car," said Lt. Mike Rossn of the L.A. County Sheriff's Department.
The chase ended in South Gate when the vehicle crashed into a shopping center at Seville Avenue and Santa Ana Street. Police said after the crash, both suspects got out of the vehicle and started running on foot.
One of the suspects shot at officers again, who then returned fire, shooting and killing the suspect. The killed suspect has not yet been identified.
"It sounded really bad," said Marcus Beta of South Gate.
The shootout left bullet holes in patrol cars and had residents ducking for cover.
"Sounded like somebody taking a hammer and hitting it on a nail, just boom boom boom ? real fast," said William Rhodes of South Gate.
Authorities are still searching for the second suspect. No suspect description was available.
No officers were hurt during the gunfight. Police are unsure why the suspects were shooting at police.
The L.A. County Sheriff's homicide department is investigating the incident. A weapon, described as a very high-powered handgun, was recovered at the scene.