Turban-wearing Sikhs are often mistaken for Muslims, and the Federal Bureau of Investigation is overseeing the probe into shootings, Oak Creek Police Chief John Edwards said.
"We're treating this as a domestic terrorist incident," he told reporters.
Four people were shot dead inside the sprawling temple. Three, including the gunman, were killed outside.
The gunman ambushed and shot a police officer several times when he responded to a 911 call and was helping a shooting victim, Edwards said.
A second officer shot the gunman dead. Edwards had no identification of the shooter or what kind of weapon or weapons he had.
The wounded officer, a 20-year veteran, was taken to a hospital and is expected to survive, he said.
The Oak Creek shooting is the latest in a series of gun rampages in the suburban United States.
The shooting came little more than two weeks after a gunman opened fire at a theater in Aurora, Colorado, killing 12 people and wounding 58. In January 2011, then-congresswomen Gabrielle Giffords was the target of an assassination attempt in which six people were killed and 13 were wounded.
"The gunman is worse than the one at the theater a couple of weeks ago because he targeted an entire community," said temple member Jagatjit Sidhu.
He was among dozens of temple members and onlookers who gathered in a parking lot near the temple after police sealed the building off.
LONE GUNMAN
Witnesses at the temple had said there was more than one gunman, but Edwards said reports of multiple gunmen were common in incidents that involved only one shooter.
"We believe there was one but we can't be sure," he said. Officers finished sweeping the temple only after hours of searching, and Edwards said the investigation was just starting.
President Barack Obama said he was "deeply saddened" and pledged his administration's commitment to fully investigate the shooting.
Obama was briefed by counterterrorism adviser John Brennan and FBI director Bob Mueller and told the situation at the temple was "under control."
"The president said that he wanted to make sure that as we denounce this senseless act of violence we also underscore how much our country has been enriched by our Sikh community," the White House said in a statement.
The Indian embassy in Washington said it was in touch with the National Security Council about the shooting and an Indian diplomat had been sent to the Sikh temple in Wisconsin.
Milwaukee's Froedtert Hospital said three men had been brought in wounded and were in critical condition. One had been shot in the abdomen, one in the extremities and face, and a third was hit in the neck.
SIKHS IN U.S.
The Sikh faith is the fifth-largest in the world, with more than 30 million followers. It includes belief in one God and that the goal of life is to lead an exemplary existence.
The temple in Oak Creek was founded in October 1997 and has a congregation of 350 to 400 people. There are an estimated 500,000 or more Sikhs in the United States.
Since the attacks of September 11, 2001 by Islamist militants, Sikhs have sometimes been confused publicly with Muslims because of their turban headdress and beards.
In September 2001, a Sikh gas station owner in Mesa, Arizona, was shot dead by a man who was said to be seeking revenge on Muslims for the hijacked plane attacks on the United States.
Members of the Milwaukee Sikh community complained to police and a state representative last year about an upturn in robberies and vandalism at Sikh-owned gas stations and stores.
New York police said they were increasing security at Sikh temples as a precaution. There are no known threats against temples in the city, they said in a statement.
Sapreet Kaur, executive director of the Sikh Coalition civil rights organization, said Sikhs had been the target of several hate-crime shootings in the United States in recent years.
"The natural impulse of our community is to unfortunately assume the same in this case," he said in a statement.
