The Lebanon Police Department is asking people to avoid the area while roads around the hospital have been closed.
Hospital employees received an alert warning them of an active shooter in the level 4 south intensive care unit and told them to shelter in place, the Valley News of Lebanon reports.
It is not clear if a shooting occurred, but police released an alert just before 3 p.m. saying they were investigating a "serious incident" at the hospital.
Heavily-armed police forces are on the scene at Dartmouth-Hitchcock Medical Center.
One person was taken into custody Tuesday in connection to reports of an active shooter at New Hampshire's largest hospital, officials said.
The state attorney general's office is investigating.
Nearby Dartmouth College said on Twitter that police were searching for a 6-foot, 1-inch (1.85 m) tall man with salt and pepper blonde hair who was wearing a red camouflage shirt.
"Dartmouth-Hitchcock Medical Center in Lebanon is now locked down following reports of an active shooter in the hospital", the facility said in a statement Tuesday afternoon.
No further information was immediately available.