Police on Thursday opened fire to disperse members of two communities as they pelted stones at each other at Tadipatri in Anantapur district.
The trouble began when the civic authorities began the road-widening work at Ashok Centre in the town and tried to dismantle the compound walls of a place of worship constructed in the middle of the road, police said.
People of a particular community then gathered at the spot and resisted the work, they said.
Later, members of the two communities started pelting stones at each other and set afire four private vehicles, prompting police to open fire to control the crowd.
Additional forces have been deployed in the town and the situation is now under control, police added.