Witnesses described screaming and confusion as armed police descended on Oxford Circus in central London after reports gunshots had been fired.
Bruce Malcomson, who works in Soho, told Sky News he was at the Tube station when the alert happened late on Friday afternoon.
"Suddenly I just heard screaming and people running out of the station. Everybody turned round in sort of pandemonium and started trying to exit the Tube as quickly as possible," he said.
"I ran out on to the street but it was almost as if no one knew anything had happened down below."
Mr Malcomson said armed police arrived after a couple of minutes.
"I think people were so unsure what had happened they were running in all directions," he said.
Per Wimmer, who was at the busy intersection where Oxford Street and Regent Street cross, said armed police were quick to respond and tweeted a picture from opposite the H&M store.
An Oxford street shopper, who did not want to be named, told Sky News he was in Liberty's department store "when suddenly everyone started running up the stairs to the higher floors".
He said he headed to the basement of the store and was kept there for some time before being escorted out by police through emergency exits.
Alex Crane, a Sky employee, said he sheltered in a restaurant near the same store.
"As I was walking up Carnaby Street I heard people shouting. I turned around and everyone was running," he said.
Mr Crane said some people reported hearing gunshots as police told them to shelter in shops and restaurants.
Armed police were later stood down and cordons lifted.
Met Police said they "responded in line with our existing operation as if the incident was terrorism, including the deployment of armed officers".
"Officers working with colleagues from British Transport Police carried out an urgent search of the area.
"No causalities, evidence of any shots fired or any suspects were located by police."