The Watauga County Sheriff's Office said deputies first responded to the home around 9:45 a.m. after the homeowner's employer reported that the employee didn't show up for work.
Deputies then went to the house for a welfare check.
When two deputies attempted to get inside the home, they were shot.
Sgt. Chris Ward was airlifted to the hospital where he later died. The other deputy, Logan Fox, was injured and taken hostage inside the home.
For 13 hours, a standoff took place between law enforcement and a suspect inside the home. By the time the standoff ended, Fox had died at the scene from his injuries.
During an initial rescue attempt of the deputies, a Boone police officer was hit by gunfire, but his protective equipment kept him from being injured.
Flags at the sheriff's office were lowered to half-staff Thursday morning for the fallen deputies.
"This is an incredibly tragic situation and our thoughts and prayers are with everyone involved as well as their families and our community," said Watauga County Sheriff Len Hagaman in a statement. "I greatly appreciate the tremendous support we are receiving from law enforcement agencies across the region and the state."
"It's hard. I know God's got another angel," Donna Ward, a relative of Chris Ward, told WSOC. "A very loving family, loving. He would do anything for you."
The three other people dead include the suspect, his mother and his stepfather.
Their identities have not yet been released.
The North Carolina State Bureau of Investigation is investigating.