At least 10 seriously injured victims are being treated at the University Medical Center of El Paso.
Authorities are struggling to treat all the injured, prompting a plea for residents to urgently donate blood.
President Donald Trump has been briefed and said in a Tweet there were "many killed" in the "terrible shootings".
Police responded on Saturday afternoon local time to an active shooter situation at the Cielo Vista Mall, which is near Interstate 10 on east side of the city, and were advising people to stay away from the area.
Shoppers cowered in the department store as shots rang out.
Witnesses say at least one gunman began opening fire in the car park at the Walmart store near a shopping mall, killing multiple people. A local TV channel says up to 18 people have been shot.
The chief of staff to the city's mayor told local media there were multiple victims.
Three suspects were in custody, El Paso Mayor Dee Margo told CNN.
Dan Patrick, Texas' lieutenant governor, said that the suspect in custody is a 21-year-old male.
It still isn't clear how many people have been killed or hurt.
"We're searching multiple scenes, but primarily the Walmart," said Sgt. Enrique Carrillo of the El Paso Police Department, pointing to a nearby mall as another area of focus. "There is not an imminent threat. There is no active shooter currently."
Earlier, El Paso police warned people to stay away from the mall and take cover, warning there could be more than one shooter, when the first shots were fired about 11am local time.
"We have multiple reports of multiple shooters. Please avoid area police conducting search of a very large area."
Fox News reported the shooting began outside of the Walmart and then the gunman moved inside in the shop.
A witness from the scene told Fox News she saw the gunman wearing a black t-shirt and cargo pants and carrying a rifle.
The gunman shot people seeking shelter is corners of the shop, she said.
There may be a second incident at the JC Penney in the same mall. There have been reports of two male shooters at the JC Penney, according to CBS News
Beto O'Rourke, the Democratic presidential candidate and former U.S. congressman who represented El Paso, tweeted: "Truly heartbreaking. Stay safe, El Paso.
"Please follow all directions of emergency personnel as we continue to get more updates."
Perfect definition of: “WHITE SUPREMACY!!” Definición perfecta de: "¡SUPREMACIA BLANCA!" Nuestras más sinceras condolencias! 😰 💔R.I.P. Q.E.P.D. 🙏 💔Que horrible experiencia !!!! Balacera en Walmart! We don’t need weapons of war on our streets or in the hands of sick people!!! 💔💔🙏☠️😈😷
Posted by Sylvia Saucedo on Saturday, 3 August 2019
- More to come