Israeli warplanes and artillery retaliated, bombing targets on the Lebanese side in the area, witnesses said.
They said Hizb Allah rockets hit the Rwaisat al-Alam post in the farms. A Hizb Allah spokesman in Beirut and the Israeli army in Jerusalem confirmed that an attack was under way. An Israeli military spokesman said that one soldier had been injured.
Israeli jets launched at least three strikes on targets near Kfar Shouba village on the Lebanese side of the border while Israeli artillery pounded the area.
Hizb Allah said in a statement that its rocket attack was in retaliation for the killing of the shepherd by Israeli soldiers in Rwaisat al-Alam on Wednesday.
Lebanon and UN peacekeepers said on Thursday that Israeli troops killed the 17-year-old inside Lebanon. Israeli sources had said the youth was armed and had been shot inside Israeli-held lines.
Sayyed Hassan Nasrallah, the leader of Hizb Allah, had vowed retaliation for the killing.
Shia Muslim Hizb Allah fighters have periodically attacked Israeli forces on the border, mainly in the occupied Shebaa Farms, since Israel ended its 22-year occupation of south Lebanon in 2000.
Lebanon says Shebaa is Lebanese. The United Nations and Israel say it is Syrian land. Hizb Allah says its attacks are in retaliation to Israeli violations of Lebanese sovereignty, including almost daily flights by Israeli warplanes.
The UN Security Council authorised its peacekeepers this week to remain another six months in south Lebanon. The force has been deployed in the area since Israel invaded in 1978.