The attack happened in Wanu village, some three kilometres (just under two miles) from the town of Gulak, at about 7:30 pm (1830 GMT) yesterday.
"They killed two people and injured one other. They went about burning homes, crops and livestock," said Maina Ularamu, a former head of the Madagali local government area.
Boko Haram has repeatedly targeted Madagali and the surrounding area in recent weeks as part of an increase in activity in Adamawa state.
Ularamu said the attackers came on foot -- an indication they did not intend to loot -- via the Waga Chakawa forest, which leads to the Sambisa Forest in Borno.
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Boko Haram fighters used the former national park as a base until it was driven out after a months-long military counter-insurgency.
At least 50 people were killed when a teenage detonated his explosives at a mosque in Adamawa's commercial hub of Mubi earlier this month.
He likened its continued use of suicide bombing and sporadic raids to "the last kicks of a dying horse".
"A dying horse manages to engage in some kicks. These kicks may be dangerous but they don't last long," he was reported as saying on a visit last Sunday to Adamawa's capital, Yola.
"Progressively they become weaker and weaker until the horse finally gives up.