The suspected shooter at Eungella, close to Murwillumbah in northern NSW, ended up in hospital after a situation police described as "confusing and chaotic".
The 45-year-old man was under police guard after sustaining serious injuries.
With the help of sniffer dogs, a second man, aged 36, was arrested hiding in bushland and charged with murder on Wednesday evening hours after the shootings.
He was refused bail to appear at court on Thursday.
NSW Police Assistant Commissioner David Waddell described the incident as "a very confusing and chaotic scene" when police arrived.
He said early investigations showed the shooting was over a property dispute.
Paramedics treated a 41-year-old man, who is yet to be identified, for a gunshot wound but he died at the scene.Â
A 38-year-old man, who also suffered a gunshot wound, took himself to hospital some time later.
"There was an altercation between the four men ... before the 45-year-old produced that firearm and shot both the 41-year-old and the 38-year-old," Mr Waddell told Radio 2GB on Thursday.
"He was run over, but he is the suspect for the two shootings."
Multiple crime scenes have been established and an investigation into the incidents is under way.
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