Sheikh Daud Ali Hasan, a senior commander of al-Shabab, an armed group fighting to topple Somalia's government, has been shot dead near Kismayo.
At least three masked men armed with pistols shot Hasan several times in the head and chest as he was coming out of a mosque on Friday night.
Abdi Hasan Ise, a witness, was quoted by the AFP news agency as saying: "I heard gunshots and saw two men running; we rushed to the scene and there was a body lying there in a pool of blood."
Hasen has been leading the fighting against rival groups in the town of Dhobley, close to the border with Kenya.
Al-Shabab and Hizbul-Islam, another group fighting against the government, have been battling alongside each other in the capital, Mogadishu, but in the south they have been at loggerheads for months.
Hizbul-Islam denied having a hand in the killing, but said it would step up attacks on Dhobley after a raid on Friday night in which it said it killed a number of al-Shabaab militants.
The two groups have fought for control of Kismayo, the main port in southern Somalia, as well as Dhobley on the main road linking the port to Kenya.
"We have already arrested several suspects and we should bring them to the justice soon," Sheikh Abukar Ali Adan, al-Shabab's chairman in the area, told a news conference in Kismayo on Saturday.
Somalia has had no effective government for 19 years and Western nations and neighbours say the anarchic country is used as a shelter by fighters planning attacks in east Africa and further afield.
The US state department says al-Shabab militants have links to al-Qaeda.
At least 21,000 Somalis have been killed in violence since the start of 2007, 1.5 million have been uprooted from their homes and nearly half a million are sheltering in other countries in the region