French riot police have repeatedly charged at a group of up to 300 England football fans outside a pub in the centre of Lille.
Dozens of tear gas canisters were fired at the "rowdy" and chanting crowd as a number of loud bangs were heard.
Several people are believed to have been injured in the incident, as other fans scattered down side streets.
They have also charged at fans in other nearby areas as more tear gas was fired, and a water cannon was on stand-by.
Less than an hour earlier, a group of England football supporters was involved in a tense stand-off with police outside a shut bar in central Lille.
Sky correspondent Paul Kelso said it was "very noisy, very rowdy and got a little out of hand", as bottles were thrown by fans.
Riot officers moved into the immediate area with stun guns and tear gas guns raised as tensions increased and more bottles were hurled.
But then a group of English and Welsh police spotters helped to diffuse the stand-off by persuading the crowd to move on.
The supporters then went down another street, accompanied by French and UK officers.
Tensions are high on the streets of the city, where police earlier fired tear gas and followed chanting England and Wales fans amid reports of scuffles and a "huge bang".
Police equipped with helmets and body armour have hit supporters with batons, while pepper spray was also used against fans who police said were behaving in a "threatening" manner.
It was unclear what sparked the confrontation, but French officers have been clearing the streets and local media say police helicopters are circling overhead.
Associated Press reported a group of about 200 English fans had been singing songs about Russia before a loud explosion was heard, and bottles thrown.
Ex-England footballer Stan Collymore said: "Somebody threw, not a grenade, something that went bang towards some England fans and the England fans have just run."
The gas and pepper spray appeared to have been used when fans ran away from the bang and towards police lines.
Collymore also posted footage which appeared to show a man smashing wing mirrors off parked cars.
According to the AFP news agency, paramedics seemed to carry out cardiac massage on a fan lying on the ground, but their nationality was not clear.
Alcohol ban
An alcohol ban has been in place in an attempt to prevent a repeat of the violent scenes in Marseille, with bars closed and shops stopped from selling booze, but some fans in Lille appeared to be drinking nonetheless.
The unrest came as Russian fans set off a flare after a goal at their Euro 2016 game against Slovakia - two teams which are in the same Group B and England and Wales.
The flame was visible from the stands as Russian supporters celebrated a goal by Denis Glushakov in the 80th minute, but their side went on to lose 2-1.
Those attending matches had been told any further trouble inside stadium grounds could cause Russia's national team to be kicked out of the tournament.
On Tuesday UEFA handed Russia a suspended disqualification over crowd disturbances at its game against England in Marseille, and the country's football federation was given a €150,000 fine.
It warned the team would be kicked out of the championship "if incidents of a similar nature (crowd disturbances) happen inside the stadium at any of the remaining matches of the Russian team".
A short time before the flare ignited, Russia's foreign minister, Sergei Lavrov, accused French authorities of "ignoring the absolutely provocative actions of fans from other countries" - in an apparent reference to England fans.
Mr Lavrov has also criticised French authorities for detaining 43 Russian fans suspected of being involved in violent clashes in Marseille and the Stade Velodrome over the weekend.
Four Russian are being deported from France after being detained in Lille - two who were arrested during a fight and another two who were discovered drunk in a car with weapons, a local official said.
England and Wales will play each other on Thursday afternoon in Lens, not far from Lille, but many have chosen to stay in the larger city ahead of the game.
Security in the city has been beefed up, with a senior police officer warning fans looking to start any trouble that "we are ready to fight against this violence".
More than 2,500 police, security guards and soldiers will be on duty over the next couple of days.
Six England fans have been jailed in France, while another supporter was arrested on his return to the UK and has beenbanned from watching football for five years.
A small number of extra British police are being sent to France, while officers are working to identify 48 supporters involved in clashes.
Russia's next match will be against Wales in Toulouse on Monday.
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