The officer was identified as Jason Schneider, 36, a 13-year-veteran of the force and with the tactical unit since 2004.
Police said Schneider and other officers had been going room-to-room in the house when he was shot several times. Officials said he was a married father of two.
He returned fire and hit a suspect, who remains in critical condition at the Maryland Shock Trauma Center. Police did not identify the suspect Wednesday morning.
"During a well-prepared police event, Officer Schneider was killed in the line of duty and we deeply mourn his loss," said County Executive Kevin Kamenetz. "I can only tell you that we don't always appreciate what our police do for us every day but it's times like this when we know how grateful we are for their bravery and their sacrifice."
Chief James W. Johnson said Schneider was "a leader within that unit. This is a terrible loss for Baltimore County."
Johnson said a county tactical team entered a home on Winters Lane, near Roberts Avenue, "after an extensive tactical briefing and much planning." The officers were attempting to apprehend an individual wanted for a shooting a week earlier on Winters Lane."
Once the officers got inside, Johnson said people began to flee. He said the suspects clearly knew that the officers were police.
When Schneider turned a corner inside the home, he was shot multiple times. "As he was going down, he returns fire striking the suspect several times," Johnson said.
He said the department is continuing to investigate where the guns came from and other circumstances of this shooting.
Governor Martin O'Malley on Wednesday ordered the Maryland State Flag flown at half-staff in honor of Schneider.
The last Baltimore County officer who was killed by gunfire was in 2000. Sgt. Bruce Allen Prothero was working off-duty as a security guard when he chased suspects from a Pikesville jewelry store. Officer John W. Stem, Sr. died the same year as a result of gunshot wound from a shooting in 1977. The last city officer shot by a suspect and killed in the line of duty was Troy Lamont Chesley in 2007. Officer William Torbit was killed in January 2011, by fellow officers.
Johnson, who held back tears as he spoke about coping with the loss of an officer, said "these things hurt terribly," he said, as police officers depend on each other and become especially close."You're dependent upon your coworkers."
Johnson said the county has seen an overall decline in violent crime over the past five years, but the shooting is the fourth incident of gunfire in the larger Catonsville area in the last month. Johnson said the tactical unit was serving a warrant in relation to one of those shootings.
On Aug. 21, a 16-year-old boy was shot in the arm north of Route 40 and the Westview Shopping Center, closer to Woodlawn.
On Aug. 19, a man was shot in the 100 block of Winters Lane, a short distance from the police-involved shooting on Wednesday.
On Aug. 17, two men were shot in the 5300 block of Edmondson Ave. near the city line.
In July 2012, another county tactical officer was attacked by a resident with a sword in a Reisterstown home when police attempted to execute a search warrant in an attempted murder case. The resident was killed and the officer was uninjured.
"On behalf of the 817,000 residents of Baltimore County, my thoughts and prayers go out to the family of Tactical Officer Jason Schneider who was shot and killed this morning while doing what our police officers do fearlessly each and every day protecting our Baltimore County neighborhoods," Kamenetz said in a statement issued later.
The statement continues to address the rest of the police department, "please know that we appreciate your service and know that you are in great pain having lost a brother in arms this morning," and asked everyone in Baltimore County to take a moment of silence for Schneider.