It happened shortly after 8pm last night in a car park on the Rathfriland Road.
The victim, who is aged in his 40s, was shot in the abdomen. He is in hospital where his condition has been described as serious.
Another male, also in his 40s, has been arrested.
Several roads were closed in Co Down as police investigated the incident.
Detectives are also exploring a link between the driver of a silver Citroen vehicle which made off from the scene southbound on the A1 dual carriageway and a vehicle reported on fire 20 minutes later in the Drone Hill Road area of Corbet.
Ulster Unionist leader Doug Beattie urged anyone with information to come forward, saying it was “a shocking incident”.
“Guns do not belong on our streets. If you have any information regarding this incident please get in touch with the PSNI,” he added.
DUP MP Carla Lockhart said the victim was in hospital.
“I would encourage anyone with any information to come forward to the PSNI either via 101 or Crimestoppers on 0800 555 111,” she said.
“Please allow the PSNI time and space to investigate this serious incident.”
Local Alliance MLA Eóin Tennyson said those behind the shooting do not represent the wider community in Upper Bann.
“I utterly condemn this sickening attack, as will any right-thinking individual,” he said.
“My thoughts are with the victim of this terrible incident, who I hope makes a full recovery from his injuries.
“The local community in Banbridge has been left shocked by this shooting. Those behind it certainly do not represent anyone in the town or indeed further afield. There is no place for guns on our streets and the culprits need taken off our streets.
“I appeal to anyone with information on this incident to contact police with it immediately.”
A spokesperson for the Northern Ireland Ambulance confirmed one person was taken to the Royal Victoria Hospital in Belfast.
“The Northern Ireland Ambulance Service received a 999 call at 8.06pm following reports of an incident in the Tullyear Close area of Banbridge,” they said.
“NIAS despatched a Rapid Response Paramedic and an emergency crew to the incident.
“Following assessment and initial treatment at the scene, one patient was taken by ambulance to RVH in Belfast.”
A police spokesperson said: “Anyone with any information is asked to contact police on 101 quoting reference number 1683 12/04/24. Information can also be given anonymously through the independent charity Crimestoppers on 0800 555 111.
“You can submit a report online using the non-emergency reporting form via http://www.psni.police.uk/makeareport/.”
William Turner is a seasoned U.K. correspondent with a deep understanding of domestic affairs. With a passion for British politics and culture, he provides insightful analysis and comprehensive coverage of events within the United Kingdom.