The incident, which happened at 6.40pm on Sunday night, saw armed police called to an address in Harehills Avenue.
A 26-year-old was arrested on suspicion of conspiring to possess a firearm.
Ammunition and some counterfeit money was recovered during a search of the property in Harehills Avenue, Chapeltown.
A West Yorkshire Police spokesman saId: "At 6.40pm last night (21/1) officers from Leeds District Serious Organised Crime Unit executed a search warrant at an address in Harehills Avenue, Leeds, with support from firearms officers.
"A 26-year-old man was arrested on suspicion of conspiring to possess a firearm. He remains in custody.
"Ammunition and a quantity of counterfeit cash was recovered during a search of the property. Enquiries are ongoing."