During the incident, the alleged gunman fired at several homes while residents sheltered inside and then pelted bullets at a police car.
Police were first called to Dunoon – a village of around 800 people 20 kilometres north of Lismore – at 9pm, with reports shots had been fired at a home on Rayward Road.
While en route to the property, officers received reports of more shots being fired at two other homes on the same street and another on nearby Duncan Road.
Residents were at home at the time but were not injured.
When police arrived at the scene, they heard more shots being fired nearby.
A police car was repeatedly shot at, causing significant damage to the vehicle.
A police operation commenced and the area was cordoned off.
Specialist Tactical Response officers, negotiators, Police Rescue and the Dog Unit were called in, as well as a police helicopter sent from Queensland.
He was taken to Lismore Police Station, where he is assisting police with their inquiries.
Police are continuing to investigate the circumstances leading up to the alleged shooting spree.
This content first appear on 9news