Emergency services were called to an Aparima St address about 7.50pm after reports of a firearm being discharged.
The pair were airlifted to hospital, one with serious injuries, and one with moderate injuries.
Police said in a statement they do not believe there is any risk to the public but confirmed the suspects were yet to be found.
Southland Area Commander Inspector Mike Bowman appealed for anyone with information to come forward.
“The offenders fled the scene before police arrived and they are still outstanding.
“We know there will be people in the community who know who did this, and we’re asking them to help us.
“This is clearly a serious incident, and police are treating all factors with urgency.”
A neighbour this morning said they heard nothing last night and were alerted that there was an active shooter by a family member.
"We were asleep and we got a phone call from the mother-in-law saying there's a shooter going round," he said.
"That's why we've got everything locked up.
"We've only been in here for a year and that's probably the sixth time the cops have been to that house over there."
A scene guard remained at the Aparima St property overnight and a scene examination would be carried out this morning, police said.
An Otago Daily Times reporter at the scene last night said attention appeared to be focused on a unit on a rear section.
At 9pm, two ambulances and one police car remained on the scene.
An armed police officer was also seen standing guard in the driveway.
A neighbour said there were "always things going on" in the small block of rental units.
Police were often in and out, and attended an incident a couple of weeks ago about 3am.
Another neighbour told the ODT they heard no sirens in relation to the incident.
It was only when an officer knocked on their door they noticed something had happened.
Anonymous reports can be made through Crime Stoppers, by calling 0800 555 111.
