The report, quoting local authorities, said the early morning violence occurred in Lukqun township of Shanshan County in the Turpan Prefecture of the restive region.
Chinese Communist Party officials in the region said knife-wielding mobs attacked the township's police stations, the local government building and a construction site, Xinhua reported. The officials said the mobs stabbed people and set police cars on fire.
"Seventeen people had been killed -- including nine policemen or security guards and eight civilians -- before police opened fire and shot dead 10 rioters," Xinhua said, quoting the officials.
Xinhua said police captured three rioters at the scene and were looking for others.
Similar violence in Xinjiang-Uighur in April claimed 21 lives.
The region, close to the border with Pakistan and Afghanistan, has been an ethnically tense area where there has been much violence in recent years. Ethnic unrest has been simmering in the area because the Muslim Uighurs, who are a Turkic-speaking minority in China, say they resent being ruled by the majority Han Chinese.
In July 2009, about 200 people died in Urumqi, capital of Xinjiang-Uighur. Since then, China has increased its government surveillance and police actions, triggering more resentment among the Uighurs.
China maintains foreign Uighur groups linked to the East Turkistan Islamic Movement are to blame for the trouble in the region. Chinese authorities have said the movement trains in neighboring Pakistan but the World Uighur Congress, based in Stockholm, Sweden, disputes the allegations.