Authorities said three more people were injured by stampeding patrons fleeing the shooting.
The mayor of Little Rock said all of the victims are expected to survive after gunfire broke out inside the downtown Power Ultra Lounge nightclub around 2:30 am (0730 GMT).
"I want to reassure our public that this was not an act of terrorism but a tragedy... It does not appear to be a planned shooting," Mayor Mark Stodola told a press conference.
A disagreement involving a small number of patrons at the club quickly escalated because of "the presence of rivalries and weapons," Stodola said.
Authorities did not immediately release any names or information on a suspect or suspects.
However Police Chief Kenton Buckner said some members with the headliner group, including one with a gun, had been stopped by police after trying to enter the nightclub. They appear to have gained access to the club later through a different entry way.
Buckner said the victims ranged in age from 16 to 35, with two in critical condition.
"We have no reason to believe at this time that anyone in the general public is at harm of any incident," he added.
Authorities are investigating whether a longstanding rivalry between feuding gangs was to blame for the violence, and said they have closed down the club in the wake of the shootings.
"I think when you have a concert venue where you have young people and force these two cities into a small room and some kind of dispute ensues, it was a recipe for disaster," Stodola said.
"Little Rock's crime problem appears to be intensifying," Arkansas Governor Asa Hutchinson said in a statement, decrying "this senseless violent tragedy."
He promised state resources to help "support local law enforcement efforts."
The FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the US Marshalls were working on the case, Stodola said.
The mayor thanked first responders and hospitals on Facebook.
"My heart is broken this morning -- my prayers are with the victims of this tragedy," he said.
"We must do more to keep guns out of the hands of the wrong people. And government can do something to help us with that," he said during the press conference, expressing outrage that promotional material featuring a firearm had been used to advertise the event.
According to the nightclub website, an artist by the name of Finese 2 Tymes was scheduled to perform.
Police had initially had said that 17 people were shot, before updating the toll later Saturday.
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