One suspect was taken into custody shortly after the shooting on Sunday night, which sent panicked families running for cover, the New Orleans Police Department said.
The victims were three males and two females, including one child, the department added
Police said all five were taken to the hospital, where one of the male victims was pronounced dead.
The four other victims remained in hospital but were considered to be in a stable condition by Monday.
The shooting happened during the Krewe of Bacchus parade, WWL-TV reported, in a neighbourhood outside the tourist-packed French Quarter.
Comedian and actor Adam Devine was among those taking part in the parade.The route was filled with families with young children enjoying the parade when they heard gunshots, witnesses told the station.
Chaos ensued as people ran, took cover and tried to protect their children.Two guns were recovered, Chief Deputy Superintendent Hans Ganthier said. The parade was temporarily halted after the shooting.