Borno state police commissioner Ade Ajakaiye said he could not yet confirm the number of casualties among the 60-man squad which was attacked on Friday, but that some policemen were known to have been taken prisoner.
"We received information that members of the Taliban group attacked our men on patrol around Kala-Balge bushes," he said by telephone.
Nigeria's self-styled "Taliban" are a small group of Islamists who were inspired by their Afghan namesakes and who claim to be fighting to create an independent Muslim state in the arid north-east of the country.
"The nature of the attack and the fact that our men were taken hostage clearly show that this must be the handiwork of the Taliban," Ajaikaye said.
Ajakaiye said military and police reinforcements backed by two military helicopters had been dispatched to the area to investigate.
The Nigerian Taliban first came to the fore in December 2003 when they launched a short-lived rebellion, seizing control of a small area of farmland and semi-desert on Nigeria's northern border with Niger.
They attacked several police stations, raised the Afghan flag and declared independence, but the uprising was put down within weeks by Nigerian forces.
Last month the group appeared again, attacking police posts in Borno State and killing four officers and a civilian in raids from bases on the Cameroonian border. They took seven people captive, two of whom they killed.
Cameroonian and Nigerian forces have since been cooperating and several rebels have been shot or arrested. Security patrols have been stepped up in the border area and Cameroon is due to extradite five suspected fighters.
Nigeria's Taliban are thought to be led by a clique of university graduates from the north-eastern city of Maiduguri, some of them from the region's most influential political families.
Officials have claimed that they received training and funding from Islamic bodies and charities in the Middle East, although as no prosecutions have yet begun evidence as to their origins is sketchy.
US officials have recently expressed concern that the remote areas of central north and west Africa, where state authority is weak, could become breeding grounds for extremist groups.