The US Embassy in Myanmar held a tear gas training exercise on Sunday night that sparked rumours of an explosion and brought emergency services to the scene, a police officer said.
Speculation rippled across social media after fire trucks and ambulances were seen outside the embassy compound in Myanmar's largest city, but local officer Zaw Win told AFP "it was not a bomb explosion".
"They were testing tear gas inside the practice grounds of their embassy. Gas came out onto the road in front of the embassy and some people smelled it and informed us," he said.
No one was injured and the gas did not cause any damage to the embassy, he said.
The embassy had apologised for not informing police of the test in advance, he added.
While bombings were relatively common under the former junta that stepped down in 2011, such incidents have been rare in recent years.
A series of small blasts rocked the country in October 2013 after they appeared to target tourist spots just as the emergent nation was experiencing a flood of foreign visitors following the end of military rule.