Police director Lazar Scepanovic told a news conference that the suspect killed four people in a restaurant in the town of Cetinje. The gunman then moved to three other locations, killing more people, including two children.
The suspect had been drinking heavily for most of the day, he said.
"This person is in the Cetinje area. The perimeter is narrowed. ... We will do everything to put this person under control and apprehend him," Scepanovic said.
Prime Minister Milojko Spajic said the shooting was a "terrible tragedy". (EPA PHOTO)
In a live TV broadcast from outside a medical centre, Montenegrin Prime Minister Milojko Spajic called the incident a "terrible tragedy" and declared three days of national mourning.
He did not mention the number of casualties, but said four people had been transferred to a hospital in Podgorica, the capital, for surgery.
"It seems that according to the first information ... the perpetrator did not have the background of someone who is a member of organised crime groups. There was a brawl where pistols were used," Spajic said.
Montenegro's president, Jakov Milatovic, also reacted to Wednesday's attack.
"I am stunned and horrified with the tragedy in Cetinje. ... We are praying and hoping for the recovery of the wounded," he said in a statement.
Cetinje was eerily quiet and snow-covered streets were literally empty except for law enforcement on Wednesday. Special police and anti-terrorist units searching for the suspect fanned out to hills. Cetinje sits in a shallow valley surrounded by rugged mountains.
Montenegro police sent special units to the area and urged people to remain inside their homes. Footage showed police cordoning off a neighbourhood with lamp posts twinkling with festive lights.
Mass shootings are comparatively rare in Montenegro, which has a deeply rooted gun culture.
In 2022, 11 people, including two children and a gunman, were killed in a mass shooting in Montenegro, which also injured six others.
Despite strict gun laws, the Western Balkans comprised of Serbia, Montenegro, Bosnia, Albania, Kosovo and North Macedonia remains awash with weapons. Most are from the bloody wars in the 1990s, but some date back even to World War I.
Spajic said authorities would tighten criteria for carrying firearms, including the possibility of a complete ban on weapons.