Soldiers kept patrolling the Rocinha slum in Rio de Janeiro on Saturday where new shootouts erupted early in the morning.
The government deployed the Brazilian army in Rio's largest slum on Friday afternoon after the violence forced authorities to shut roads, close schools and health units and isolate the area for a few hours.
The defence ministry said as many as 950 troops were deployed around the perimeter of Rocinha, where some of the most intense battles took place.
The troops would provide backup so that military police, including elite squads of commandos, could go after traffickers in the hills that make up the sprawling community in the city's south, defense ministry spokesman Raul Jungmann said.
The operation comes just as the city is hosting the Rock in Rio festival, featuring concerts by groups such as Bon Jovi, Guns N' Roses and the Red Hot Chili Peppers.
Military police, tasked with patrolling and going after suspects, had been doing operations in Rocinha since Monday.
The intensity of the firefights - gunshots are often heard in Rio - increased on Friday and erupted in other neighbourhoods, including Alemao, Dona Marta, Vila Kennedy and Chapeu Mangueira.
Several gangs are fighting for predominance in Rocinha and violence also is fed by armed militias of former police and military personnel that sometimes take security into their own hands.
About 8,500 troops were deployed in August to try to curb rising violence a year after Rio hosted the Summer Olympics.
However, the troops have mostly been patrolling, not engaging with traffickers.