The American University of Afghanistan in Darul Aman Road in Kabul city came under attack just after 7pm on Wednesday.
Dozens of students and staff are believed to be trapped inside the university building.
According to sources, there was an initial explosion followed by gunfire.
One student said he managed to escape along with other students but that many are still trapped inside the building.
A number of gunmen reportedly entered the building after blowing open an entry point into the heavily guarded compound.
Reports also indicate that there are casualties but no official confirmation has as yet been received.
This comes just two weeks after two of the university’s professors were kidnapped. One was an American and the other an Australian.