The gun battle took place at Sitachuwa village under the jurisdiction of the Mohammadganj police station.
Three bodies have been recovered. One of those killed has been identified as Ajay Yadav, on whose head the police had put a reward of Rs 10 lakh, the police said.
One injured Maoist rebel was arrested and seven rifles, including one AK-47, were seized from the spot.
Maoist guerrillas are active in 18 of the 24 districts of the state