Emergency services, including armed police and an ambulance, were called to an incident in Pittenweem on Tuesday morning.
Frightened residents reported seeing armed police on University Terrace, as well as at least eight police vehicles and an ambulance.
Police confirmed a 46-year-old man was arrested and said there was no wider threat to the public.
A resident of the Fife village, who asked not to be named, said people were told to stay indoors.
She added: “There is an armed police siege in University Terrace in Pittenweem.
“There are 30 to 40 police and they’ve shut off the street.
“They’ve told neighbours not to come out of the house.
“People are frightened.”
Residents told to stay indoors
One University Terrace resident said: “I left my house at around the back of 9am to go shopping and there was nothing happening.
“When I was on my way home I passed some police at Colinburgh, not thinking they were coming here.
“When I came back at around 10.30am I couldn’t get into my street as police were blocking the entrance.”
She added: “I had to park around the corner and I just saw loads of police, some were armed.
“There must have been about 12 police cars and the same amount of folk.
“There were armed police and the dog unit.
“It feels very strange, something like this happening on our street.
“It’s usually quiet, everybody loves living in this street and a lot of people want to live here.”
‘Very strange’
Another witness said: “There were about eight or nine police vans and cars on University Terrace and one ambulance.
“I think there may have been even more police vehicles down the road as they were blocking the entrances to the street.
“There were about four armed police officers with dogs.
“The police must have been here for a couple of hours, they left at about half past 11.”
Another University Terrace resident said: “I didn’t see what happened but I’m very nervous about this.
“There were at least four police vans parked right outside my house.
“There was even an ambulance that came down at one point.
“I don’t understand why there was so many police on this street, it makes me concerned.”
No injuries
A Police Scotland spokesperson said: “We were called around 9.20am on Tuesday November 30 to a report of a concern for person in Pittenweem.
“Officers, included an armed unit, attended and a 46-year-old man was arrested.
“No one was injured and there was no threat to wider public.”
