The men, believed to be the same ones pictured in images released Thursday by the FBI as suspects in the marathon bombing that killed three people and wounded about 180, hurled explosives at pursuing officers during the chase through Watertown.
The men are shown in the images walking together near the finish line of the marathon. The first suspect, the one believed killed by police, appears in the images wearing a dark hat, sunglasses and a backpack, CNN reported.
The second suspect, wearing a white cap, is the one who remains at large, police said.
The suspect hails from Chechnya or Turkey and has lived in the US for several years, Fox New reported citing a law enforcement source.
Authorities, it said, are investigating whether 19-year-old Dzhokhar A. Tsarnaev, of Cambridge, Massachusetts, and his brother may have had military training overseas.
Federal, state and local law officers are swarming through the Boston suburb of Watertown, going door-to-door to track him down, CNN said citing Massachusetts State Police spokesman Col. Timothy Alben.
Police officers in full body armour, carrying automatic weapons, flooded the area.
"This situation is grave." Alben said. "This is a very serious situation that we are dealing with."
Police ordered businesses in the suburb of Watertown and nearby communities to stay closed and told residents to stay inside and answer the door for no one but authorities.
The subway and Amtrak train systems have been shut down. Every Boston area school, including Harvard University and Harvard Kennedy School, have been closed.
Boston's public transit authority sent city buses to Watertown to evacuate residents while bomb experts combed the surroundings for possible explosives.
The violence began late Thursday with the robbery of a 7/11 convenience store, CNN said.
Soon after, in Cambridge, across the Charles River from Boston, a Massachusetts Institute of Technology (MIT) police officer was fatally shot while he sat in his car, the Suffolk County District Attorney's Office said.
Police believe the bombing suspects were responsible for the shooting. The same two suspects, according to authorities, then hijacked a car at gunpoint in Cambridge.
They released the driver half hour later at a gas station. As police picked up the chase, the car's occupants threw explosives out the windows and shot at officers, according to the district attorney's office.
Officers fired back, wounding one of the men, possibly the person identified by the FBI as suspect No.1, who is seen in the images released Thursday in a dark cap, sunglasses and wearing a black backpack.
The man died at Beth Israel Hospital. He had bullet wounds and injuries from an explosion, according to officials, CNN said.
The second man apparently escaped on foot. A transit system police officer was also seriously injured in the incident and taken to a hospital, the channel said. His condition was not mmediately known.