Elite police units are hunting drug gang leaders blamed for five days of violence in Rio de Janeiro.
The push into the Vila Cruzeiro shanty town left at least eight people dead and one police officer wounded, authorities said.
It is part of a police campaign to clean up Rio's drug gang-ridden slums before the city hosts the World Cup in 2014 and the Olympics two years later.
Gangs members have responded to the offensive against strongholds where they have held sway for decades by setting up roadblocks on major routes to rob motorists, torching more than 40 cars and buses and shooting at police posts.
Authorities say that when police arrive, gang members flee into nearby shanty towns.
The officers arrived in Vila Cruzeiro yesterday under the cover of police helicopters and amid the rattle of gunfire despite the gang members' efforts to block access with burning vehicles.
As police entered, dozens of gangsters were seen fleeing down jungle-covered hills, across an area known as "the green hell", to a neighbouring gang stronghold, the Alemao complex of shanty towns.
The state police would have additional help today from government law enforcement to hold on to Vila Cruzeiro, Rio state public safety director Jose Beltrame said.
Mr Beltrame said the police were in Vila Cruzeiro "and we're not leaving".
Security officials said that while Brazil's navy lent the armoured vehicles to police, the marine drivers by and large did not engage in any fighting.
The personnel carriers are armed with high-calibre gun turrets, but there were no reports that the larger weapons were used inside the slum.
Businesses in the neighbourhood shut down during the operation and officials sent 12,000 pupils home from 10 schools and a day care centre in the region, the city's education department said.
Police said they arrested 11 men and seized gallons of petrol and sticks of dynamite yesterday.
Since Sunday night, authorities have arrested more than 150 suspects in police raids on nearly 30 shanty towns in the northern and western parts of Rio.
At least 23 people have died, many of them suspected gang members.
As part of the pre-World Cup and Olympic clean-up, authorities have established permanent police posts in 13 slums over the past two years to try to bring basic services to the communities and rid them of drug trafficking-related violence.
A member of the elite BOPE police unit who would only give his last name, Malta, said as he waited for his turn to go into Vila Cruzeiro: "The idea is to go in and take control.
"We can't live like this with these people threatening our families. It's zero tolerance now."