It happened at about 2:45 a.m. at Paterson Billiards, a second floor billiards hall on Market Street in Paterson.
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The victim, identified as 34-year-old Dontrelle Horne, of Paterson, was taken to a nearby hospital, where he was pronounced dead.
Employees inside say that two people got into an argument and one shot the other.
Police closed several streets in downtown Paterson, including Market Street, for the investigation.
Police were looking for three men who fled the scene in a 2009 Mercedes Benz, which was stolen from someone in Elizabeth.
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Several people were detained in the pool hall following the shooting, but no arrests were immediately made
Paterson Billiards is the city's only licensed pool hall, and per city regulations, must close by 1 a.m.
Police officials said the shooting appears to have occurred after the pool hall was supposed to have been closed.
The business was the site of a previous non fatal shooting, but has since been operating under new ownership.
This was the city's 22nd homicide this year.
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