Police had not said by Saturday afternoon whether the man was killed by police, who fired at him, or took his own life, The Denver Post reported.
While authorities had not released the names of the gunman or the victims, or even what weapons were involved, the Post said neighbors and other sources identified the shooter as Sonny Archuleta, 33, and the victims as his father-in-law, his sister-in-law and her boyfriend. The gunman's wife escaped by jumping from an upstairs window, neighbors said.
The standoff began after the wife got out of the house just before 3 a.m. MST and called for help, saying she had seen three "lifeless" bodies, Aurora police spokeswoman Cassidee Carlson said.
Aurora was the scene of one of the most notorious recent mass shootings in July when 12 people were killed at a midnight showing of "The Dark Knight Rises."
The gunman in Saturday's shooting fired at an armored vehicle dispatched to the neighborhood. Police evacuated residents of nearby homes.
"I was brutally awakened. I've never been so scared in my life," Michael Ignace, who lives in another unit in the building where the shootings occurred, told the Post.
The gunman could be heard moving furniture against the doors of the townhouse, Carlson said. He answered the telephone several times as police tried to negotiate with him but said nothing intelligible.
"He was not making sense," Carlson said.