It happened just before 1:30 a.m. along a canal bank near Thorne and Saginaw, in the area of Palm and Dakota.
Officers responded to a shotspotter call and found 47-year-old Ruben Sanchez of Fresno suffering from two gunshot wounds to his upper body.
Emergency responders performed CPR on Sanchez and rushed him to the hospital, where he later died.
Investigators say Sanchez was in a verbal argument with the suspect before the shooting.
"There was another encampment along the canal bank, so we're checking with them," said Fresno Police Lt. Anthony Dewall. "There was another subject actually in the tent with the victim, so we're trying to get her statement. I believe it was a girlfriend, significant other... so we're getting her statement as well."
Police say Sanchez was not involved in criminal activity.
The suspect ran from the scene. A description has not been released.
Anyone with information is asked to contact the Fresno Police Department.