Armed police were called to Gloucester city centre after a person was reportedly seen with a suspected firearm inside a block of flats.
The incident happened at around 12.30pm on Thursday, when officers received a report of a sighting at an address in the area.
Specialist firearms units were deployed and carried out a search of the building.
Two men and one woman, all from Gloucester, were arrested on suspicion of possession of a firearm.
Gloucestershire Police confirmed the trio were taken into custody, where they remain while enquiries continue.
Anyone with further information is asked to contact police.