A fleet of emergency services vehicles, including fire appliances, ambulances and police cars are in attendance in Mina Crescent in Kinglassie.
It is understood the situation escalated after fire officers were called to tackle a blazing 4X4 vehicle outside a property in the street in the early hours of Saturday.
The village is sealed off at either end by Police Scotland, with officers turning all traffic back. Officers from the specialist specialist firearms unit were called in. Shouting could be heard from within the property, which is understood to be the home of a middle-aged man.
Locals initially claimed that shots had been fired and a hostage was being held within the property, which police have denied.
A Police Scotland spokesperson said: “Officers are currently at a property in Mina Crescent, Kinglassie, after a man barricaded himself within. There is no risk to the wider public.”