Police in the city of Little Rock had initially said that 17 people were shot when gunfire rang out inside the downtown Power Ultra Lounge nightclub around 2:30 am (0730 GMT).
They updated the toll later Saturday to 25 shot and three with unrelated injuries, adding on Twitter that "ALL are expected to survive."
"We do NOT believe this incident was an active shooter or terror related incident," police said. "It appears to have been a dispute at a concert."
"Little Rock's crime problem appears to be intensifying," Arkansas Governor Asa Hutchinson said in a statement, decrying "this senseless violent tragedy."
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He promised state resources to help "support local law enforcement efforts."
Little Rock Mayor Mark Stodola thanked first responders and hospitals on Facebook.
"My heart is broken this morning -- my prayers are with the victims of this tragedy," he said.
According to the nightclub website, an artist by the name of Finese 2 Tymes was scheduled to perform.