Workers armed with sticks, rocks and Molotov cocktails clashed with rifle-wielding police in the Veng Sreng factory district of Phnom Penh, according to an AFP photographer.
Police fired warning shots in the air and then fired at the protesters, the photographer saw.
"Three people died and two were injured," Phnom Penh deputy police commissioner Chuon Narin told AFP.
One blood-soaked worker was seen lying on the ground while another was rushed away by motorcycle after what was the latest in a series of violent clashes between security forces and textile workers demanding higher wages.
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Opposition leader Sam Rainsy denounced the crackdown.
"It's an unacceptable attempt to break not only a worker strike but the whole worker movement as well as the democratic movement which is developing in Cambodia following the July elections," he told AFP.
Rights activist Chan Soveth of local rights group Adhoc, who was at the site, said as many as 10 strikers were badly injured.
Security forces "used rifles and other things to crack down on the strikers," he said. "They beat them on their heads."
He said two protesters were arrested.
"We were afraid about the security so we had to crack down on them," said Kheng Tito.
"If we allow them to continue the strike it will become anarchy."
Disputes over wages and safety conditions are common in Cambodia's multi-billion dollar garment industry which supplies brands like Gap, Nike and H&M.
The sector employs about 650,000 people and is a key source of foreign income for the impoverished country.
The workers are demanding a minimum wage of USD 160 per month. The latest clash came a day after a special military unit was deployed against garment workers, leaving several injured in a move described by rights activists as a "disturbing new tactic" by the authorities.