The incident occurred Tuesday night near 189th and Loretto Lane in Country Club Hills.
The ATF said it was conducting the operation at about 5:30 p.m. when an ATF special agent and a task force officer fired their guns in response to an attempted armed robbery of undercover agents, hitting two suspects. Authorities said the task officer is with the Chicago Police Department.
Both suspects were taken into custody and transported to the hospital, where they were in stable condition.
A third person is accused of assaulting an officer, officials said.
Witnesses, who did not want to speak on camera, told ABC7 they heard multiple gunshots. They reported seeing one person with a ski mask running through the neighborhood followed by a massive law enforcement response.
Investigators could be seen surrounding a white vehicle. A couple of blocks away at Martin Lane and Martin Court, more agents focused on a black Mitsubishi.
The ATF said Illinois State Police, the FBI and Chicago Police Department assisted in the investigation.
COPA is also investigating because a Chicago police officer was involved.