San Diego: An initial inspection at Naval Medical Centre San Diego found no sign of a gunman or a shooting, the Navy said Tuesday.
Navy spokesman N Scott Sutherland said military police had checked Building 26 after a person reported hearing three shots in the basement earlier in the day.
School officials said a lockdown has ended and instruction has resumed at three schools near the medical center.
In addition, TV images showed uniformed Navy personnel walking outside the medical facility. Their hands were in the air and they were being patted down by base police as a precaution.
The Navy hospital previously said on its Facebook page that an active shooter was reported and people were told to run, hide or fight.
Earlier, an "active shooter" was reported at a San Diego military hospital Tuesday, the facility in southern California said, warning people inside to take cover or fight back.
"An active shooter has just been reported in building #26 at Naval Medical Centre San Diego. All occupants are advised to run, hide or fight," the facility posted on its official Facebook page.
The nearby Naval Base San Diego also posted information online about a possible shooting.
"If in immediate danger, hide or seek shelter in secure space," the base wrote on Facebook.
"Barricade the door and dial 911. Silence phones and other devices."
Local news station CBS 8 reported that police had confirmed shots were fired outside Building 26 on the hospital's third floor.
San Diego, the southernmost city on the California coast, has a sprawling military infrastructure and is a major port for the US Navy.
The hospital is located in Balboa Park, close to San Diego's famous zoo.