Boko Haram insurgents reportedly attacked Buni Yadi in Yobe State and forced residents to flee into forests on Sunday evening.
Sources told journalists the insurgents stormed the town in large numbers and started shooting sporadically.
Security agents had quickly mobilised to the town to repel the attack.
Buni Yadi had recorded a few Boko Haram attacks in the last few years, with the February 25, 2014 raid on the Federal Government College in the town still fresh in the minds of many Nigerians.
The militants barged into the college on the night of that fateful day and killed 59 male students.
They also set fire on 24 buildings in the college