Greater Manchester Police said the alarm was raised at around 9.30pm on Monday, with specialist officers deployed to Romney Street.
The force said a crossbow was recovered during the callout.
A 54-year-old man was arrested on suspicion of possession of an offensive weapon.
Six teenagers, aged between 16 and 18, were also arrested on suspicion of affray.
Police issued a 24-hour dispersal order for Cheetham Street West, Littleton Road, Poppy Lane, Langley Road South and Lissadel Street.
Detective Superintendent Simon Moyles said: “Our frontline officers’ rapid response to a concerning report prevented what could have been a dangerous incident from occurring.
“There was a large group of youths gathering in the area, and officers intervened in fights and helped several young people return home safely. Thankfully, no one at the scene required medical treatment.
“Our investigation is moving at a pace; we have arrested seven people and taken a weapon off the streets while enquiries are ongoing.”
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A police presence will remain in the area as enquiries continue.
DS Moyles added: “We understand an incident of this nature will cause alarm, and we encourage anyone with concerns to speak with a neighbourhood officer; they are there to help.”
