Police are not releasing many details because the investigation had not been completed, but one official says officers were "observing a group" that later got into a confrontation with back-up officers outside.
Police say five of the seven officers at the scene fired shots, leaving two people injured and killing a groom to-be, Sean Bell, on his wedding day as they were leaving a bachelor party.
The two officers who did not fire have been questioned by police.
The shooting has drawn angry protests from family members and the Reverend Al Sharpton.
The intersection where the shooting occurred was blocked off this afternoon as police inspected a car and a minivan and placed dozens of crime scene markers on the ground where shell casings had been found.
The shooting happened just after 4 a.m. around 143-39 95th Ave. in the Jamaica section of Queens, near Club Kalua, said Officer Kathleen Price, a police department spokeswoman.
It was not immediately clear what provoked the shooting, but the incident drew outcry from community leaders and family who demanded answers about how it happened. Paul Browne, chief spokesman for the New York Police Department, declined comment Saturday morning.
The man who died was taken to Jamaica Hospital Medical Center, said Sgt. Mike Wysokowski, another spokesman. The other two were taken to Mary Immaculate Hospital nearby, with one in critical condition and the other stable. The three men ranged in age from 23 to 31 years old.
Relatives said Bell, 23, was a father of two.
Robert Porter, who identified himself as Bell's first cousin, said he was supposed to be a DJ at the wedding. He said about 250 people were invited to the ceremony and were flying in from all over the country.
"I can't really express myself. It's a numb feeling," Porter said. "I still don't want to believe it, a beautiful day like this, and he was going to have a beautiful wedding, he was going to live forever with his wife and children. And this happened."
There were no reports that any officers were wounded in the incident. As many as eight officers may have been involved, but it was not immediately clear what roles each played, Wysokowski said.
Denise Ford, mother of one of the surviving shooting victims, told WCBS-TV correspondent Tamsen Fadal that the men's car hit another vehicle as they left the club celebrating the groom impending wedding.
"They made a mistake and ran into a DT car," she said, whereupon she claimed officers exited their car and opened fire.
Bullets pierced another car, a house and a window of a nearby train platform.
Ford blamed what she described as the police officers' over-reaction to the accident: "They're too hotheaded — something needs to be done about them."
Abraham Kamara, 38, who lives on Liverpool Street a few blocks from where the shooting occurred, said he was getting ready for work at about 4 a.m. when he heard gunfire.
"First it was like four shots," he said. "And then it was like pop-pop-pop like 12 times."
He hesitated for a few minutes before going outside until he saw a swarm of police cars and a police helicopter converge on his street.
Roy Brown, who said he works as a photographer at the club, said that not long after the men left the club, police sirens filled the air, and Brown and others emerged to learn the three had been shot.
"They weren't rowdy or nothing like that," said Brown, 57, of Queens, who said he knew some of the men's relatives. "This is ugly what happened."
Sharpton went to Jamaica Hospital on Saturday after a request from Bell's family. At a news conference there, Sharpton stood with about two dozen members of Bell's and his fiancee's family, calling on police to give "real answers" about the shooting.
"I will stand with this family," he said. "This stinks. Something about the story being told did not seem right."
Sharpton said he intends to probe the circumstances surrounding the shooting and whatever justification the police might give for it. "This family deserves answers, deserves justice, and we intend to stand with them to get it," he said.
Sharpton said Bell and his fiancee had two children, one 3 years old and the other 5 months old.