Armed police in Staffordshire swooped on a group of teenagers in Hanley, Stoke-on-Trent, after they were spotted pointing BB guns at each other in the city centre.
The teenagers were caught on CCTV camera, sparking the alert.
Staffordshire Police said it had seized two BB weapons and ammunition following the incident.
Three teenagers, aged 16 and 17, were arrested on suspicion of firearms offences.
All have since been released on bail.
A 27-year-old man detained at the same time has been released and no further action will be taken against him.
The alert was sparked when CCTV operators at Hanley's CCTV control unit saw what appeared to be armed men in the street and called the police.
Armed officers and dog units were deployed to the scene in Stafford Street just before 4.15pm.
A spokesman for Staffordshire Police warned that anyone carrying an imitation firearm in a public place could expect to be challenged by firearms officers.
"They could be faced with a real firearm pointed at them and an officer shouting instructions," he said.
"The officers have to make a split-second decision about if a threat is real or not from a distance. The actions of those carrying such weapons for fun causes fear amongst other people. It is not a game."