The hunt followed the as-yet-unexplained killing of an Auckland man, Dean Stuart Browne, 38, whose body was found in a double garage behind a city dwelling on Friday night.
The armed offender squad (AOS) initially searched for the two men within city limits but shifted their attention last night to Lake Mangamahoe, off State Highway 3 about midway between New Plymouth and Inglewood.
Mr Browne's body was found in the garage in Drake St by one of the house occupants on Friday night.
Police believe that Mr Browne may have been killed elsewhere and his body dumped in the garage up to 24 hours earlier.
A post mortem examination has been done but police have not revealed the cause of death.
Detective Senior Sergeant Grant Coward last night urged caution but asked for the public's help locating the suspects.
It was not known if the two were armed but Mr Coward warned they were dangerous and should not be approached.
The police hunt began yesterday afternoon, when officers working at the Drake St address where the body was found spotted the men in a car and chased them on foot.
A third man, an associate of the two fugitives, was arrested in New Plymouth and will be charged with unlawful possession of a firearm.
Police have recovered a white 1993 four-door Toyota Corolla hatchback.
The grisly discovery of Mr Browne's body has left residents of the quiet Drake Street stunned and bewildered, The Taranaki Daily News reported.
They said their thoughts were with the family who found Mr Browne's body, a single mother with young children who moved in only 18 months before.
Police have said Mr Browne was not known to the family.
Joy Siebert, who lives directly next door to the house, said no-one in the street knew the young family very well, but she had seen the children playing in the yard quite often. "We don't think they'll want to come back," she said. "Can you imagine finding that?"
The family had been renting the home, she said.
Chris Rae, who lives opposite the house, said everything had been normal until Friday evening.
"The first thing I knew was when I left home about 8.20 on Friday night and all the cop cars were outside," he said.
"I was like, holy hell, what is going on? And it's been like that ever since."
