The bloodshed late Friday in the Alemao district of slums and working-class communities, or favelas, added to tension in a city still reeling from the apparent assassination Wednesday of a prominent activist who has protested police brutality.
The clash began when a drug gang opened fire on police from a stolen white Jeep, police said in a statement. Officers returned fire, capturing one of the three suspects and seizing the bullet-riddled vehicle, a revolver and an assault rifle.
However, crossfire in the busy area killed a woman, a man and a young boy, also wounding his mother and another child, police said in the statement.
According to Globo news, the toll was four dead, all killed by stray bullets, including the toddler, who was in a pram.
Globo said the boy was one, but the hyperlocal Voz das Comunidades outlet, which published a photograph of the blood-stained pram, reported he was two years old.
Police and ruthless, well-armed narco gangs wrestle for control over large parts of Rio's favelas, where almost a quarter of the city's population lives.
'Painstaking task'
In many areas, gangs operate with near impunity, but police are frequently accused by major human rights organizations of being trigger-happy and at times carrying out extrajudicial killings.
After the latest violence, police stressed in a separate statement that officers involved were being questioned and that their weapons had been taken away for analysis.
"Agents are looking for possible witnesses and security camera footage," police said.
However, faith in Rio's police is at rock bottom, locals say.
Wednesday's assassination-style murder of city councilwoman Marielle Franco, 38, prompted big protests against the seemingly intractable violence. She had been an outspoken defender of human rights in the favelas and had recently accused one police unit of acting like a death squad.
The chaos in the favelas continues despite President Michel Temer's decision a month ago to put the army in charge of Rio state's security, supposedly to bring order and resources to a failing police force.
Franco's killing renewed questions over the effectiveness of the military intervention, which has not led to any visible improvement in city safety.
Late Friday, supreme army commander General Eduardo Villas Boas said that Franco's death "only increases the need for intervention."
"It is an extremely painstaking task... to win back the feeling of security that the Brazilian people want," he said.
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