Hundreds of residents of Baramulla town took to streets to protest what they alleged ransacking of their houses by the army in the area, official sources said.
The protesters pelted stones at the army personnel who allegedly opened fire to disperse them, they said.
Five persons were injured in the firing, the sources said adding one them later succumbed to injuries.
He was identified as 25-year-old Tahir Latief Sofi, they said. The condition of one of the injured was critical.
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An army spokesman said he was collecting details about the incident.
In Jammu, the Chief Minister told the legislative assembly that a probe would be held into the killing of the youth.
Strict punishment would be awarded to those found guilty, he said.
Firing on the mob was unjustified, he told the House.
Baramulla Deputy Commissioner G M Khwaja told PTI that he had written to police to file an FIR against the concerned army unit involved in the firing incident.
"I have written to police to file an FIR in connection with the incident that resulted in the death of a youth," he said.