There were conflicting statements from tourists as to whether it was a huge bang from a motorcycle or a fight on 42nd Street.
Later, the New York Police Department (NYPD) clarified that there was no active shooter in the area.
"There is no #ActiveShooter in #TimesSquare. Motorcycles backfiring while passing through sounded like gun shots.
"We are receiving multiple 911 calls. Please don't panic. The Times Square area is very safe!," said the New York Police.
Amid the stampede scare, several families were left crying on 44th and 45th Street on Eighth Avenue after a sea of tourists started running all over following the scare.
According to some witnesses, they heard a loud bang, possibly coming from a motorcycle, and everyone started running in all directions.
They ran into shopping stores, hotels, restaurants amid scare of a mass shooting, in the wake of recent Texas and Ohio incidents in which 31 people were left dead.
The NYPD and ambulances covered the area within minutes while certain shows on the Broadway were immediately halted.
Paramedics were seen attending to families once the calm returned.
An eyewitness told that there was a fight on 42nd street, after which the panic triggered.
People during a popular Broadway show jumped on the stage amid panic, leading to the show's halt.
US President Donald Trump has condemned hatred and white supremacy in a public address following the mass shootings in Texas and Ohio late on Saturday.
( With inputs from IANS )