The shooting came the day after a masked ICE agent killed mother-of-three Renee Nicole Good in Minneapolis, sparking nationwide anger over the violent actions of militarized agents on US streets.
"Two people are in the hospital following a shooting involving federal agents," a statement from Portland Police said.
The local police force – which stressed its officers were not involved in the shooting – said they had received calls for help mid-afternoon.
"Officers responded and found a male and female with apparent gunshot wounds. Officers applied a tourniquet and summoned emergency medical personnel," the statement said.
"The patients were transported to the hospital. Their conditions are unknown. Officers have determined the two people were injured in the shooting involving federal agents."
The shooting happened near a medical facility, according to local media.
Local broadcaster KATU2 said the injured people had driven away from the scene of the shooting to an apartment complex, around 2.5 miles away, where they had called for help.
FBI agents could be seen at both locations.
Homeland Security trots out familiar account
The Department of Homeland Security confirmed a US Border Patrol agent had opened fire, and claimed he had done so in self-defense while conducting what they said was a "targeted vehicle stop."
"The passenger of the vehicle and target is a Venezuelan illegal alien affiliated with the transnational Tren de Aragua prostitution ring and involved in a recent shooting in Portland," the statement said, providing no evidence for the accusations.
"When agents identified themselves to the vehicle occupants, the driver weaponized his vehicle and attempted to run over the law enforcement agents."
"Fearing for his life and safety, an agent fired a defensive shot. The driver drove off with the passenger, fleeing the scene," the statement added.
The DHS account mirrored the one used as a justification for Good's killing in Minneapolis, despite footage from numerous angles contradicting the claims.
Portland mayor calls on ICE to end operations
Portland's mayor, Keith Wilson, said the shooting in his city was the result of the flood of heavily-armed federal agents used to wage Trump's war on immigrant communities.
"Just one day after the horrific violence in Minnesota at the hands of federal agents, our community here in Portland is now grappling with another deeply troubling incident."
"We cannot sit by while constitutional protections erode and bloodshed mounts. Portland is not a 'training ground' for militarized agents, and the 'full force' threatened by the administration has deadly consequences."
"As mayor, I call on ICE to end all operations in Portland until a full investigation can be completed."
Wilson said he wanted locals to make their voices heard peacefully.
"I call on every Portlander to represent our values and to show up with calm and purpose during this difficult time. Portland does not respond to violence with violence."