Emergency services discovered the 11-year-old boy suffering a gunshot wound at a unit in Norwest, Sydney's Hills District, about 5pm on Monday.
The boy was shot "in the face and neck" from inside the home, police said.
Four 18-year-old males and a woman, 44, were also present at the luxury apartment complex when authorities arrived.
Superintendent Naomi Moore on Monday said the group - some relatives, some friends - were "allowed access" into the home.
Three of the men were arrested and assisting police with their inquiries.
The boy was rushed to hospital after police, then paramedics rendered assistance at the scene.
Supt Moore said the boy's mother accompanied him in hospital.
"She is as distressed, as any parent would be, about what she is dealing with at the moment," she told reporters.
"It is an (absolutely) tragic situation and as we've seen some tragedy across Sydney in the last couple of days, this is not far from the worst that I have seen."
Detectives had no reason to suspect the shooting related to organised crime, she said, but would not speculate what occurred in the house.
Supt Moore said police were yet to locate a firearm, but no firearms were registered to the Fairway Drive address.
That fact will form a line of inquiry, she confirmed.
Police established a crime scene at the address and an investigation is continuing.
Anyone with information has been urged to contact Crime Stoppers.
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