Update 6 p.m.
The suspect left the home a few more times and went back inside as the fire was burning, Billings Interim Police Chief Shawn Mayo told MTN News at the scene.
He has not come back out, and police are uncertain whether he is alive, Mayo said.
Mayo confirmed that the man was not holed up in his own home. He broke into the home, armed with a knife, when three children were present, Mayo said.
The three children safely escaped the home, Mayo said.
Law enforcement officers are locked in a standoff with a man near North Park Wednesday evening.
The incident began around 3 p.m. Witnesses told MTN News that a man ran from a car into a house on the 1900 block of North Ninth Street.
At one point, the man was seen climbing out of a second-story window and onto the roof. Police fired what appeared to be non-lethal bean bags at him, and he went back inside.
Law enforcement then fired tear gas into the house, and flames were seen from the outside. It wasn't clear whether the canisters caused the fire, or the man started the fire. Billings Interim Police Chief Shawn Mayo said the canisters were "cold canisters" and unlikely the cause. Billings firefighters helped control the fire.
Billings police, SWAT team members, Yellowstone County sheriff's deputies, US marshals and Billings firefighters all responded.
Members of the public are asked to avoid the area.
This is a developing story. Check back for details.