A dog handling unit accompanied the armed officers on the scene.
Police said today the man had been charged with a breach of the peace and no firearm was recovered.
One witness said: “We heard a bit of commotion outside and then all of a sudden there were loads of armed police surrounding the area.
“We were unsure exactly what was going on but the officers were here for around an hour before they left.”
A Police Scotland spokeswoman said: “We received a report of a man believed to be in possession of a firearm on Dallas Drive, Kirkcaldy, around 8.10pm on Monday April 5.
“Armed officers attended and the man was traced in the Brodrick Road area. No firearm was recovered following a search.
“A 27-year-old man has been arrested and charged in connection with a breach of the peace.
“A report will be submitted to the procurator fiscal.”
Man arrested in Fife as armed police respond to reports of person with firearm