Police said the shooting was an intentional act toward a group of people.
The suspect stood on the cement divider in Brooklyn and fired into the crowd where thousands of people were watching the parade, police said.
"This was not random. This was an intentional act," Chief of Patrol John Chell said.
Reports of a shooting happened near Classon Avenue and Eastern Parkway.
In a news conference, police said four males and one female were stuck by the gunfire.
Police said two of the victims are in critical condition and three have non-life-threatening injuries.
At least one person is still being sought.
The suspect is described as a male 6'2" to 6'3" with a slim build, wearing a black bandana and brown shirt, who fled westbound on Eastern Parkway towards Classon Avenue, police said.