Police were called to a street near Camberwell Old Cemetery in East Dulwich, south London, shortly after 3pm on Thursday.
Detectives – who have yet to release details of the victims – were trying to establish whether the pair were among mourners attending the funeral nearby.
A spokesman said: "Police were called to the junction of Forest Hill Road and Rockells Place at 3.04pm to reports of a shooting. London ambulance service also attended.
"One person was confirmed dead at the scene. A second person is also believed to have suffered gunshot wounds and has been taken to hospital."
Police were seen walking down nearby Therapia Road, searching for evidence. Half a dozen officers scoured the street in the rain, looking in bins and skips and underneath parked cars.
One elderly male resident said helicopters were hovering overhead for most of the afternoon.
A London ambulance service spokesperson said: "We were called at 3.04pm today to reports of a shooting on Forest Hill Road. We sent two responders in cars, three ambulance crews, three motorcycle responders, the London's air ambulance, the hazardous area response team and two officers to the scene.
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