Police said the pre-dawn raid in the neighborhood of Vila Cruzeiro, on Rio's north side, targeted drug traffickers believed to have fled there from another slum nearby, Jacarezinho, where authorities have mounted a major anti-drug trafficking operation.
The Rio state police force said on Twitter the Vila Cruzeiro raid had led to clashes that left eight "criminals" fatally wounded.
"We ran into a lot of resistance moving forward to carry out our operation. Those individuals were probably part of that resistance," police colonel Luiz Henrique Marinho told news site G1.
Police said they had seized firearms, grenades and "a large amount of drugs" in the raid.
Videos posted on social media showed armored police vehicles advancing through the favela's narrow streets as shots rang out.
Rio's hundreds of slums, or favelas, are often under the de facto rule of drug gangs and militias.
Rio state Governor Claudio Castro is looking to change that with the pilot program to "reconquer" Jacarezinho, a bastion for the Comando Vermelho (Red Command), one of Brazil's biggest drug gangs.
Last month, more than 1,000 heavily armed police raided Jacarezinho to retake the favela, where the state government now plans to implement social programs and infrastructure projects to improve life for residents.
But residents, many of whom were left cowering in their homes by last month's raid, are not all convinced.
On Thursday, protesters blocked one of the favela's main streets to condemn the police killing of an alleged drug trafficker.
Jacarezinho has been the scene of some of the worst violence between police and drug gangs recently.
Last May, a police raid on the favela left 28 people dead, some allegedly killed in cold blood.
Brazil's Supreme Court last week ordered the Rio state government to present a plan within 90 days to reduce the violence of often deadly police raids in the favelas.
The court also gave the police 180 days to adopt body and vehicle cameras and GPS trackers to help hold officers accountable for their actions during such raids.
