Armed police shot a pit bull-type dog when it confronted them while officers were trying to arrest a man in Thornton Heath last night.
People living near to the house in Seneca Road report hearing six shots fired during the incident.
And the dog was seen lying dead in the middle of the street by neighbours woken up by the commotion.
A neighbour, who did not want to be named, said: "I was woken up by the shooting at about 1am. I knew straight away what the noise was.
"The dog was lying dead in the middle of the road. The police had shot it six times.
"I assumed someone had been shot inside the house as well because an ambulance came.
"The people who used to live at that house only moved out a couple of weeks ago so I don't know who lives there now."
Police had been called to the address to arrest a man on suspicion of assaulting a woman in nearby Brigstock Road a short time earlier.
One officer received a minor injury during the operation but the nature of this injury is not yet known.
Beverly Dick, 49, heard the gunshots from her house.
She said: " I heard two loud bangs in quick succession and then another three just after.
"I thought it might have been the people across the road setting off fireworks or that light across the road might have blown, because they are doing work on it.
"I rushed to have a look out the window but couldn't see anything so I went back to bed.
"It sounded like a car backfiring."
The Directorate of Professional Standards is investigating the incident.
The matter has also been referred to the Independent Police Complaints Commission.
The suspect remains in custody where he is being questioned.
There was an incident tent near the house where the arrest happened but this has now been removed.
Do you live in Seneca Road? Did you see what happened? Call the newsroom on 020 8722 6353 or email firstname.lastname@example.org.