Factional fighting that followed left between 50 and 100 people dead, Herat's senior military commander said.
In Kabul, President Hamid Karzai's Cabinet convened an emergency session following Mirwais Sadiq's killing, and ordered extra troops sent from the capital to try to calm the city.
Unidentified attackers shot Afghan aviation minister Mirwais Sadiq — son of Herat's powerful governor, Ismail Khan — in his car on Sunday afternoon, presidential spokesman Khaleeq Ahmed said.
Heavy gunbattles broke out after the killing, with police saying fighters loyal to Khan were battling soldiers of the senior local military commander, Zaher Naib Zada.
Aid workers, also reached by telephone, reported gunfire ringing out in Herat and said they had been ordered to stay indoors. U.N. workers scrambled into a bunker at their headquarters.
In Kabul, Ahmed said authorities of President Hamid Karzai's central government still were trying to determine what had occurred. Karzai's defense and interior ministers were preparing to travel to Herat, Ahmed said.
Karzai, who himself escaped a 2002 attempt on his life, said in a brief statement from Kabul that he was "deeply shocked" by the killing and offered condolences to Ismail Khan.
Sadiq is the third leading figure of Karzai's government, and the second aviation minister, to be assassinated.
Ismail Khan, a former anti-Soviet commander who runs a large private army, has had firm control over Herat since the fall of the Taliban in late 2001.
But there have been persistent tensions — and occasional factional fighting — between his men and those loyal to rival warlords.
His son, Sadiq, was widely viewed as his father's representative in Karzai's government.
A police officer answering the phone at Herat's main police station said the killing came when Sadiq had gone to Zada's house to speak to him about the alleged killing of three people by Zada's forces two weeks earlier.
The police officer said soldiers opened fire before Sadiq entered the house, killing Sadiq and people with him — a relative, an intelligence official, and two guards.
The policeman identified himself as Fahim, like many Afghans using only one name.
Other police, speaking briefly before the line cut, reported heavy gunbattles, with many dead on both sides.
State television reported that Sadiq's father, Khan, had escaped a separate attack unhurt. Ahmed and other officials said there had been no attack on Khan, however.
Karzai's first civil aviation minister, Abdul Rahman, was assassinated Feb. 14, 2002, at Kabul's airport, in circumstances that remain unclear.
Gunmen shot and killed Vice President Abdul Qadir in the capital on July 6, 2002.
Both of those killings remain unsolved.
Karzai has been constantly shadowed by Afghan and American bodyguards armed with automatic weapons since a September 2002 assassination attempt in the southern city of Kandahar. Three people, including the gunman, died in that attack.