The victims were struck at around 5 p.m. local time when gunfire rang out outside a retail sector of Red River, Questa del Rio News reported.
“It was gang-related,” Mayor Linda Calhoun said in a video posted by the news outlet on social media.
All the victims were “contained” in the shooting — none were local residents, according to the report.
Police said one victim was airlifted to a Denver hospital and said there was “no threat to public safety.”
The shooters are in custody, according to Calhoun.
Law enforcement requested that local businesses around the area of the shooting remain closed Sunday as they continue their investigation.
The fatal shooting occurred during the 41st Annual Red River Memorial Motorcycle Rally, a festival promising to bring in “28,000 bikers from all different backgrounds.”
Taos Mayor Pascualito Maestas declared a civil emergency after the shooting.
Taos, located about 40 miles from Red River, prohibited retailers, bars, and other establishments from selling alcohol under the emergency proclamation.
It also enacted a curfew until 4:00 a.m. local time Sunday.
The shooting on Sunday is among the latest in at least 225 mass shootings recorded in the United States this year, according to the nonprofit group Gun Violence Archive.
The group defines a mass shooting as any in which four or more people are wounded or killed, not including the attacker.