Members of the Yan-Gwagwarmaya sect battled the police with guns and machetes before being overwhelmed, the police say.
Residents of the remote north-western town of Birnin Kebbi complained after they tried to recruit local youths.
Five policemen, including an assistant commissioner, were seriously injured.
The group’s leader, Sanusi Makera-Gandu was also badly hurt in the clashes.
The BBC’s Elizabeth Blunt in the capital, Abuja, says this is the latest in a series of such incidents in Nigeria involving Muslim youths who set up their own communities and refused to accept conventional civil or religious authority.
The authorities refuse to say exactly how many people were killed in the raid.
The sect had incensed other local Muslim groups by calling their base the Kabah – after Islam’s holiest site in the Saudi Arabian town of Mecca.
They walked around the courtyard of their base as Muslims do on the pilgrimage to Mecca.
Casualty figures are extremely sensitive in Nigeria – and are often played down for fear of inflaming tensions.
In January, another Islamic sect calling itself the Taleban attacked police stations in north-eastern Nigeria.