Cairo: Egyptian police had arrested a man, who had taken his family hostage in his house and shot dead his mother-in-law during the saga, local media reported.
National Security Police stormed the house in the southern province of Fayyoum and freed the hostages in the hours-long drama.
Police had tried to negotiate with the hostage-taker, but he initially refused to free the family, security sources said without giving details.
Security forces blew up the gates of the house and shot the hostage-taker during an exchange of fire early Thursday before arresting him.
After storming the place and freeing the hostages, police found that the man, aged 44, had tortured his family and seized arms in his possession.
The man, identified as Ayman Abdul Maboud, had seized his wife, her mother and sister as well as their children on Wednesday during a family dispute.
Neighbours alerted police after they had heard gunfire in the house. In response, security forces rushed to the area and laid siege to the house.
Egyptian media said that the man has a criminal record and branded him as a thug. It was not immediately clear why the man had seized his family and what his demands were.