Officers told people to remain indoors after a man "dressed in medieval clothes" reportedly attacked "multiple victims" with a bladed weapon on Saturday night, CBC reported.
Police later announced they had arrested a suspect shortly before 01:00 local time (04:00 GMT).
But residents were told to stay inside as an investigation is still under way.
National public broadcaster Radio-Canada reported at least two people have been killed and five wounded. Police have not yet confirmed any deaths or injured but are due to make a statement shortly.
The attack took place around Parliament Hill in the historic Old Quebec neighborhood.
MR/PR